Miss. Admin. Code tit. 35 | Miss. Admin. Code Title 35 — Tax

MISSISSIPPI BOARD OF TAX APPEALS MISSISSIPPI BOARD OF TAX APPEALS

Part 101 Rules of the Mississippi Board of Tax Appeals

Chapter 1 Creation, Purpose and Transition from the State Tax Commission

35 Miss. Admin. Code Pt. 101, R. 1.1 Creation and Purpose of the Board

The Board of Tax Appeals is a quasi-judicial state agency independent of the Department of Revenue that was created by the Mississippi Legislature to hear administrative appeals from orders of the Board of Review of the Department of Revenue and from other specific acts of the Department of Revenue.

History

Source: Miss. Code Ann. § 27-4-3(1)(a) (Rev. 2010)

35 Miss. Admin. Code Pt. 101, R. 1.2 Transition from the State Tax Commission

The rules set out in Part 101 of this Title shall apply to those administrative appeals filed with the Board of Tax Appeals where the assessment, refund claim, request for waiver of a tag penalty, the suspension, revocation, surrender, seizure or denial of permit, tag or title, the suspension, revocation or denial of an ABC permit, ABC manager status, qualified resort area or forfeiture of property under the ABC law involved in the appeal occurred on or after July 1, 2010. If an assessment, refund claim, request for waiver of a tag penalty, the suspension, revocation, surrender, seizure or denial of permit, tag or title, the suspension, revocation or denial of an ABC permit, ABC manager status, qualified resort area or forfeiture of property under the ABC law occurred prior to July 1, 2010, the regulations of the State Tax Commission and the statutes which were in effect prior to July 1, 2010 shall apply to such actions. The only exception to application of the regulations of the State Tax Commission and the statutes which were in effect prior to July 1, 2010 to such actions is that the Board of Tax Appeals shall hear and consider the final administrative appeal of such action instead of the three (3) member State Tax Commission.

History

Source: Miss. Code Ann. § 27-4-3(1)(a) (Rev. 2010)

Chapter 2 Definitions

35 Miss. Admin. Code Pt. 101, R. 2.1 Definitions

The words, terms and phrases defined in Miss. Code Ann. § 27-77-1 shall have the same meaning as that set out in Miss. Code Ann. § 27-77-1 when used in Part 101 of Title 35 unless the context requires otherwise. In addition, the following words, terms and phrases when used in Part 101 of Title 35 shall have the following meaning unless the context requires otherwise:

A. ABC Division means the division within the Department of Revenue responsible for the administration and enforcement of the ABC law. B. ABC law means the Local Option Alcoholic Beverage Control Law and the Mississippi Native Wine Act of 1976. C. ABC manager status means the approval from the ABC Division that a person is required to receive to become a manager of a business holding an ABC permit.

D. ABC permit means a permit issued by the ABC Division under the ABC law. E. ABC permittee means a person holding an ABC permit, applying for the issuance or transfer of an ABC permit or renewing an ABC permit. F. Administrative appeal means any appeal or other proceeding which the Board of Tax Appeals is authorized to hear and decide, including, but not limited to, an appeal to the Board under Miss. Code Ann. § 27-33-41(i), § 27-35-113(7), § 27-77-5, § 27-77- 11 and § 27-77-12, an objection to an assessment under Miss. Code Ann. § 27-35- 309, § 27-35-311, § 27-35-325, § 27-35-517 and § 27-35-703, an appeal to the Board under Miss. Code Ann. § 67-1-72(1), (2), (3) and (4), a written objection and request for a hearing under Miss. Code Ann. § 67-1-72(5) and (6) and a request for a hearing under Miss. Code Ann. § 67-1-72(7). G. Administrative hearing officer means a person appointed by the commissioner of the Department of Revenue to hear an appeal on the intended suspension, surrender, seizure or revocation of a permit, IFTA license, IRP credential, IRP registration, tag and/or title. H. Ad valorem assessment means an assessment for ad valorem purposes issued by the Department of Revenue for the assessment of railroads and other public service companies under Miss. Code Ann. § 27-35-309, the assessment of property escaping taxation under Miss. Code Ann. § 27-35-325, the assessment of railcar companies under Miss. Code Ann. § 27-35-501, or the assessment of aircraft of airline companies under Miss. Code Ann. § 27-35-703. I. Appellant means the party in the administrative appeal that filed the written appeal or written objection with the Executive Director that initiated the administrative appeal before the Board. Appellant shall also mean a person who filed with the ABC Division a written objection and request for hearing in regard to the issuance or transfer of an ABC permit and/or the declaration of an area or locality as a qualified resort area of which the Executive Director was advised by the ABC Division under Miss. Code Ann. § 67-1-72(5) & (6) for the purpose of setting a hearing. J. Associate member means an associate member of the Board of Tax Appeals. K. Board, except when included in the phrases “Review Board” or “Board of Supervisors”, means the Board of Tax Appeals as created under Miss. Code Ann. § 27-4-1. L. Business day or working day means any day on which the Board of Tax Appeals is open. M. Day means calendar day except when appearing in the phrases “business day” or “working day”. N. Department or Department of Revenue means the Commissioner of Revenue acting directly or through his duly authorized officers, agents, representatives and employees, to perform duties and powers prescribed by the laws of this state to be performed by the Commissioner or the Department of Revenue. O. Document means any book, paper, account, letter, map, photograph, film, card, tape recording or reproduction thereof, and any other documentary material, regardless of physical form or characteristics, including, but not limited to, such materials maintained electronically on a computer, server or other electronic storage media. P. Electronic transmission means information or a document being communicated or transmitted by fax or e-mail.

Q. He means he, she, it or they and may refer to any type of person that by statute can file an administrative appeal to be heard by the Board. The masculine gender shall be deemed to include the feminine. The plural shall be deemed to include the singular and vice versa. R. Party means any person or entity who is a party to an administrative appeal filed with the Board of Tax Appeals, including, but not limited to, the Department and the ABC Division. S. Public record shall have the same meaning as set out in Miss. Code Ann. § 25-61-3 for that term unless the context requires otherwise. T. Record means any book, paper, account, letter, map, photograph, film, card, tape recording or reproduction thereof, and any other documentary material, regardless of physical form or characteristics, including, but not limited to, such materials maintained electronically on a computer, server or other electronic storage media. U. Review Board means the Review Board of the Department of Revenue as appointed by the commissioner pursuant to Miss. Code Ann. § 27-77-3. V. Qualified resort area shall have the same meaning of that term as set out in Miss. Code Ann. § 67-1-5 but excluding those areas or localities included in the definition of that term in Miss. Code Ann. § 67-1-5 that do not require the declaration of same by the Department as a qualified resort area.

History

Source: Miss. Code Ann. § 27-4-3(1)(a) (Rev. 2010)

Chapter 3 General Information

35 Miss. Admin. Code Pt. 101, R. 3.1 Addresses and Contact Information for the Board and Executive Director

A. The offices of the Board are located at: 2679 Crane Ridge Drive, Suite A Jackson, MS 39216-4997 B. The contact information for the Board and the Executive Director is: Mailing Address: 2679 Crane Ridge Drive, Suite A Jackson, MS 39216-4997 Telephone No.: (601) 981-3025 Fax No.: (601) 981-6810 E-mail Address: ExecutiveDirector@bta.ms.gov.

History

Source: Miss. Code Ann. § 27-4-3(1)(a) (Rev. 2010)

35 Miss. Admin. Code Pt. 101, R. 3.2 Membership of the Board, Presiding Member and Quorum

A. The Board consists of three (3) members: one (1) chairman and two (2) associate members. Members are appointed by the Governor and confirmed by the Mississippi Senate for staggered six (6) year terms. B. The member appointed and confirmed as Chairman of the Board shall, when present, preside over the meetings and hearings of the Board. In the Chairman’s absence, the

associate board member having the longest continuous tenure on the Board shall preside. C. Any two (2) members of the Board shall constitute a quorum for the transaction of business. Formal adoption of the decision of the Board in regard to any administrative appeal requires the presence of a quorum.

History

Source: Miss. Code Ann. § 27-4-3(1)(a) (Rev. 2010)

35 Miss. Admin. Code Pt. 101, R. 3.3 Jurisdiction

When filed by the appropriate person, as provided by statute, the Board has jurisdiction to hear timely administrative appeals in regard to the following matters:

A. Decisions of the Review Board regarding the assessment of taxes, the denial of tax refunds or the denial of a request for waiver of tag penalty; B. Decisions of the Review Board and administrative hearing officers of the Department regarding the suspension, surrender, seizure and/or revocation of a permit, IFTA license, IRP credential, IRP registration, tag, motor vehicle title or manufactured housing title; C. Decisions of the Review Board regarding the denial of a permit, IFTA license, IRP credential, IRP registration, tag, motor vehicle title or manufactured housing title; D. Decisions of the ABC Division to revoke or suspend an ABC permit, qualified resort area or ABC manager status; E. Decisions of the ABC Division to deny an application for the issuance or transfer of an ABC permit; F. Written objections and requests for a hearing regarding an application for issuance or transfer of an ABC permit; G. Decisions of the ABC Division to deny the renewal of an ABC permit; H. Decisions of the ABC Division to deny the application for a qualified resort area; I. Written objections and requests for a hearing regarding an application for a qualified resort area; J. Decisions of the ABC Division to deny the application of a person for ABC manager status; K. Written requests for a hearing on the proposed disposal of alcoholic beverages or raw materials under Miss. Code Ann. § 67-1-18; L. Decisions of the Department under Miss. Code Ann. § 27-33-41(i) to deny the objection of a Board of Supervisors to the Department’s rejection of an application for homestead exemption; M. Decisions of the Department regarding examination of the recapitulation of the assessment rolls of a county under Miss. Code Ann. § 27-35-113; N. Written objections to ad valorem assessments by the Department of railroads and other public service companies under Miss. Code Ann. § 27-35-309; O. Written objections to ad valorem assessments by the Department of property escaping taxation under Miss. Code Ann. § 27-35-325; P. Written objections to railcar assessments by the Department under Miss. Code Ann. § 27-35-501; Q. Written objections to ad valorem assessments by the Department of aircraft under Miss. Code Ann. § 27-35-703; and

R. In other matters as provided by law.

History

Source: Miss. Code Ann. § 27-4-3(1)(a) (Rev. 2010)

35 Miss. Admin. Code Pt. 101, R. 3.4 Meetings and Hearings; Frequency, Location and Exemption from the Mississippi Open Meetings Act

A. The Board shall meet at least one (1) day a month. The date, time and location of the meetings of the Board shall be set by the Board. B. Once a meeting of the Board is called to order, the Board shall be considered to be in continuous session from day to day until the meeting is formally adjourned on motion and majority vote of the members present. C. That portion of any meeting or hearing of the Board held in regard to an administrative appeal filed under Miss. Code Ann. § 27-77-5, § 27-77-9, § 27-77-11 or § 27-77-12, which are appeals from orders of the Review Board and from orders of administrative hearing officers, shall be closed to the public and is exempt from the requirements of the Mississippi Open Meetings Law, Miss. Code Ann. § 25-41-1 et seq. That portion of any meeting or hearing of the Board regarding all other administrative appeals, including, but not limited to, appeals under Miss. Code Ann. § 67-1-72 regarding ABC matters, appeals regarding the denial of an objection by a Board of Supervisors to the Department’s rejection of an homestead exemption application under Miss. Code Ann. § 27-33-41, appeals regarding ad valorem assessments under Miss. Code Ann. § 27-35-309, § 27-35-311, § 27-35-325, § 27-35- 517 or § 27-35-703 and appeals by a county from the decision of the Department in regard to its examination of recapitulations of the ad valorem rolls of that county under Miss. Code Ann. § 27-35-113, shall be open to the public and subject to the requirements of the Mississippi Open Meetings Law, Miss. Code Ann. § 25-41-1 et seq. When an administrative appeal filed under Miss. Code Ann. § 27-77-5, § 27-77- 9, § 27-77-11 or § 27-77-12 is to be heard or discussed, the presiding board member may order the removal of any person not directly involved in the administrative appeal being heard or who is not necessary for the Board’s deliberation on such an appeal.

History

Source: Miss. Code Ann. § 27-4-3(1)(a) (Rev. 2010)

35 Miss. Admin. Code Pt. 101, R. 3.5 Requests for Information and Documents of the Board of Tax Appeals

A. Information concerning the Board can be obtained by calling or writing the Board or the Executive Director and/or from the Board’s website (www.bta.ms.gov). B. Any request for inspection, copying and/or other reproduction of any public record of the Board shall be made in writing to the Executive Director, the custodian of the records of the Board. Within seven (7) working days from the date of the receipt of the request, the Executive Director shall provide the public record requested or provide the person making the request with an explanation as to why the public record cannot be produced within this seven (7) working day period. If the reason the public record requested was not produced is because the record is exempt from such

disclosure or production, this explanation shall also state the specific exemption upon which the Executive Director relies in determining that the record requested is exempt. C. Where it is determined that the public record requested should be disclosed or produced and the person requesting the record has pre-paid the cost of this production in sufficient time to allow for the location and copying of the record to be produced, the Executive Director shall, if possible, produce the public record requested within seven (7) working days from receipt of the request, and if not, within fourteen (14) working days from receipt of the request unless additional time is agreed to by the person requesting the public record. If the person requesting the public record has not pre-paid the cost of production within sufficient time to locate and copy the public record within this fourteen (14) working day period, the public record will be produced within a reasonable time after receiving the pre-payment of the cost of the production. D. Information and records of the Board concerning administrative appeals from orders of the Review Board and from orders of administrative hearing officers are prohibited from being divulged and are exempt from the Mississippi Public Records Act of 1983, Miss. Code Ann. § 25-61-1 et seq., except as provided in Miss. Code Ann. § 27-77-15. E. Information and public records of the Board concerning administrative appeals other than those from orders of the Review Board and from orders of administrative hearing officers, including, but not limited to, appeals regarding ABC matters under Miss. Code Ann. § 67-1-72, denials of objections to the Department’s rejections of homestead exemption applications under Miss. Code Ann. § 27-33-41, objections to ad valorem assessments under Miss. Code Ann. § 27-35-309, § 27-35-311, § 27-35- 325, § 27-35-517 or § 27-35-703 and appeals by counties from the decision of the Department in regard to its examination of recapitulations of the ad valorem rolls of counties under Miss. Code Ann. § 27-35-113, are subject to the Mississippi Public Records Act of 1983, Miss. Code Ann. § 27-61-1 et seq. and thereby subject to being disclosed, inspected, copied and/or mechanically reproduced as provided by that act and in accordance to the procedures set out in subsections B and C above. F. The records of the Board shall be retained in accordance with the record retention schedules approved by the state records committee for such documents. Upon expiration of the applicable time period set out in the approved record retention schedules, the records shall be destroyed, or when appropriate, transferred to the Mississippi State Archives. G. The fees for inspection, copying or reproducing records of the Board are as follows: 1) If the record requested is maintained by the Board as a paper document, the fees for inspection and copying will be as follows: (a) $2.50 for locating each paper document requested; (b) $0.50 for each page of the paper document to be copied; (c) The cost of postage or other delivery charges if the copy of the document is to be mailed through the US postal service or delivered through another delivery service (FedEx, UPS, etc.). 2) If the record requested is maintained by the Board in an electronic form, including, but not limited to, any audio and/or video recording of a hearing

maintained on tape, cd, dvd or on any other storage media, the fee to be charged will be the actual cost incurred by the Board to retrieve, produce, copy and provide the record, including, but not limited to, the following: (a) Any software or programming costs; (b) Any charges from the Department of Information Technology Services; (c) Any charges for services provided by a private provider of information technology, computer and/or audio visual services; (d) Operation cost of computer and/or printer; (e) Paper cost if printed and provided on paper; (f) Cost of the storage media (tape, cd, dvd, etc.) to which the record is copied; (g) Time spent by a Board employee to retrieve, produce, copy and/or print the record; and (h) The cost of postage or other delivery charges if the record is to be mailed through the US postal service or delivered through another delivery service (FedEx, UPS, etc.). 3) If the person requesting the record also requests that a record be certified as true and correct by the Executive Director, the fee for such certification shall be $1.00 for each record so certified. H. The Board or the Executive Director shall waive the fee set out above for any request for records by another state agency, including, but not limited to, the State Auditor, the Department or the ABC Division.

History

Source: Miss. Code Ann. § 27-4-3(1)(a) (Rev. 2010)

35 Miss. Admin. Code Pt. 101, R. 3.6 Declaratory Opinions

A. This rule sets forth the Board’s requirements governing the form, content, and filing of requests for declaratory opinions, the procedural rights of persons in relation to the written requests, and the Board’s procedures regarding the disposition of requests as required by the Miss. Code Ann. § 25-43-2.103. B. The Board will issue declaratory opinions regarding the applicability to specified facts of: 1) a statute administered or enforceable by the Board, 2) a rule promulgated by the Board, or 3) an order issued by the Board. C. A request must be limited to a single transaction or occurrence. D. When a person with a substantial interest, as required by section 25-43-2.103 of the Administrative Procedures Act, requests a declaratory opinion, the requestor must submit a printed, typewritten, or legibly handwritten request. 1) Each request must be submitted on 8-1/2” x 11” white paper. 2) The request may be in the form of a letter addressed to the Board or in the form of a pleading as if filed with a court. 3) Each request must include the full name, telephone numbers, and mailing address of the requestor(s).

All requests shall be signed by the person filing the request, unless represented by an attorney, in which case the attorney may sign the request. 5) Each request must clearly state it is a request for a declaratory opinion. E. Any party who signs the request shall attest that the request complies with the requirements set forth in these rules, including but not limited to a full, complete, and accurate statement of relevant facts ant that there are not related proceedings pending before any agency, administrative or judicial tribunal. F. Each request must contain the following: 1) A clear identification of the statute, rule, or order at issue; 2) The question for the declaratory opinion; 3) A clear and concise statement of all facts relevant to the question presented; 4) The identity of all other known persons involved or impacted by the facts giving rise to the request including their relationship to the facts, and their name, mailing address, and telephone number; and 5) A statement sufficient to show that the requestor has a substantial interest in the subject matter of the request. G. The Board may, for good cause, refuse to issue a declaratory opinion. The circumstances in which declaratory opinions will not be issued include, but are not necessarily limited to: 1) The matter is outside the primary jurisdiction of the Board; 2) Lack of clarity concerning the question presented; 3) There is pending or anticipated litigation, administrative action or anticipated administrative action, or other adjudication which may either answer the question presented by the request or otherwise make an answer unnecessary. 4) The statute, rule, or order on which the declaratory opinion is sought is clear and not in need of interpretation to answer the question presented; 5) The facts presented in the request are not sufficient to answer the question presented; 6) The request fails to contain information required by these rules or the requestor failed to follow the procedure set forth in these rules; 7) The request seeks to resolve issues which have become moot or are abstract or hypothetical such that the requestor is not a substantially affected by the rule, statute or order on which the declaratory opinion is sought; 8) No controversy exists or is certain to arise which raises a question concerning the application of the statute, rule or order. 9) The question presented by the request concerns the legal validity of a statute, rule or order; 10) The request is not based upon facts calculated to aid in the planning of future conduct, but is, instead, based on past conduct in an effort to establish the effect of that conduct; 11) No clear answer is determinable; 12) The question presented by the request involves the application of a criminal statute or sets forth facts which may constitute a crime; 13) The answer to the question presented would require the disclosure of information which is privileged or otherwise protected by law from disclosure;
The question is currently the subject of an Attorney General’s opinion; 15) The question has been answered by an Attorney General’s opinion; 16) One or more requestors have standing to seek an Attorney General’s opinion on the proffered question; 17) A similar request is pending before this agency or any other agency, or a proceeding is pending on the same subject matter before any agency, administrative or judicial tribunal, or where such an opinion would constitute the unauthorized practice of law; or 18) The question involves eligibility for a license, permit, certificate or other approval by the Board or some other agency and there is a statutory or regulatory application process by which the eligibility for said license, permit, or certificate or other approval may be determined. H. Within forty-five (45) days after receipt of a request for a declaratory opinion which complies with the requirements of these rules, the Board shall, in writing: 1) Issue an opinion declaring the applicability of the statute, rule or order to the specified circumstances; 2) Agree to issue a declaratory opinion by a specified time but not later than ninety (90) days after receipt of the written request; or 3) Decline to issue a declaratory opinion, stating the reasons for its action. The forty-five (45) day period shall begin on the first business day after which the request is received by the Board. I. Declaratory opinions and requests for declaratory opinions shall be available for public inspection and copying at the expense of the viewer during normal business hours. All declaratory opinions and requests shall be indexed by name, subject, and date of issue. Declaratory opinions and requests which contain information which is confidential or exempt from disclosure under the Mississippi Public Records Act or other laws shall be exempt from this requirement and shall remain confidential.

History

Source: Miss. Code Ann. § 25-43-2.105 (Rev. 2006)

35 Miss. Admin. Code Pt. 101, R. 3.7 Rulemaking Oral Proceedings

A. This rule applies to all oral proceedings held for the purpose of providing the public with an opportunity to make oral presentations or written input on proposed new rules, amendments to rules, and proposed repeal of existing rules before the Board pursuant to the Administrative Procedures Act. B. When a political subdivision, an agency, or a citizen requests an oral proceeding in regards to a proposed rule adoption, the requestor must submit a printed, typewritten, or legibly handwritten request. 1) Each request must by on 8-1/2” x 11” white paper. 2) The request may be in the form of a letter addressed to the Board or in the form of a pleading as if filed with a court. 3) Each request must include the full name, telephone numbers, and mailing address of the requestor(s). 4) All requests shall be signed by the person filing the request, unless represented by an attorney, in which case the attorney may sign the request.

C. Notice of the date, time, and place of all oral proceedings shall be filed with the Secretary of State’s Office for publication in the Administrative Bulletin. The Board shall provide notice of oral proceedings to each requestor. The oral proceedings will be scheduled no earlier than twenty (20) days from the filing of the notice with the Secretary of State. The Executive Director, or designee who is familiar with the substance of the proposed rule, shall preside at the oral proceeding on a proposed rule. D. Public participation shall be permitted at oral proceedings in accordance with the following: 1) At an oral proceeding on a proposed rule, persons may make statements and present documentary and physical submissions concerning the proposed rule. 2) Persons wishing to make oral presentations at such a proceeding shall notify the Board at least three business days prior to the proceeding and indicate the general subject of their presentations. The presiding officer in his or her discretion may allow individuals to participate that have not contacted the Board prior to the proceeding. 3) At the proceeding, those who participate shall indicate their names and addresses, identify any persons or organizations they may represent, and provide any other information relating to their participation deemed appropriate by the presiding officer. 4) The presiding officer may place time limitations on individual presentations when necessary to assure the orderly and expeditious conduct of the oral proceeding. To encourage joint presentations and to avoid repetition, additional time may be provided for persons whose presentations represent the views of other individuals as well as their own views. 5) Persons making presentations are encouraged to avoid restating matters that have already been submitted in writing. Written materials may, however, be submitted at the oral proceedings. 6) Where time permits and to facilitate exchange of information, the presiding officer may open the floor to questions or general discussion. The presiding officer may question participants and permit the questioning of participants by other participants about any matter relating to that rulemaking proceeding, including any prior written submissions made by those participants in that proceeding. No participant shall be required to answer any question. E. Physical and Documentary Submissions presented by participants in an oral proceeding shall be submitted to the presiding officer. Such submissions shall become the property of the Board, part of the rulemaking record, and are subject to the Board’s public records request procedure. The Board may record oral proceedings by stenographic or electronic means.

History

Source: Miss. Code Ann. § 25-43-2.105 (Rev. 2006)

Chapter 4 General Rules of Practice

35 Miss. Admin. Code Pt. 101, R. 4.1 Ex Parte Communications

A. There shall be no verbal communications by a party or his representative with the Board or its members regarding any issue of fact or law involved in an administrative appeal pending before the Board without notice and opportunity for all parties to participate. There shall also not be any written communication or electronic transmission by a party or his representative to the Board or its members regarding an issue of fact or law involved in an administrative appeal pending before the Board unless the written communication or electric transmission is also served on all parties in the administrative appeal. For purposes of this subsection, representative means not only the designated representative of a party in the administrative appeal, but anyone who is an officer or employee of a party or otherwise represents the party in any capacity at the time of the administrative appeal. B. Nothing in this section shall prevent a party or his designated representative from unilaterally seeking clarification of purely procedural matters, orally, in writing or by electronic transmission, by directing questions about same to the Executive Director. If the questions are directed to the Executive Director in writing or by electronic transmission, the party or his designated representative shall also serve a copy of same on all parties to the administrative proceeding. Nothing in this section shall prevent the Department and the Executive Director from communicating orally, in writing or by electronic transmission as provided in Rule 5.7 to obtain computations requested by the Board or other documentation or information necessary for the Executive Director to perform his duties including, but not limited to, drafting the Board’s orders.

History

Source: Miss. Code Ann. § 27-4-3(1)(a) (Rev. 2010)

35 Miss. Admin. Code Pt. 101, R. 4.2 Persons Authorized To Represent Parties Before the Board

The persons who are generally authorized to appear on behalf of a party before the Board are as follows:

A. All attorneys licensed and in good standing to practice law in this State; B. All accountants who have received a certificate as a certified public accountant from the Mississippi State Board of Public Accountancy and maintain such certification; C. All other accountants practicing accountancy within this State and who are entitled to practice as enrolled agents before the Internal Revenue Service; D. Certified public accountants duly admitted to practice accountancy by the appropriate authorities in other states, the District of Columbia, or other American jurisdiction and other accountants practicing accountancy outside of this State who are entitled to practice as enrolled agents before the Internal Revenue Service; E. Attorneys licensed to practice law and in good standing in another state, the District of Columbia, or other American jurisdiction; F. Any employee of a party where such employee is duly appointed by the party to undertake such representation before the Board or such representation is within the scope of the employee’s employment with the party; G. Any natural person appearing and representing himself; H. A party’s spouse; I. Any natural person representing a partnership, general or limited, in which he is a partner;

J. Any natural person representing a limited liability company in which he is a member; K. Any natural person representing a corporation in which he is an officer; and L. Any other natural person that the Board determines is of good moral character and repute and possesses the qualifications necessary to appear on behalf of others in the administrative appeal before the Board.

History

Source: Miss. Code Ann. § 27-4-3(1)(a) (Rev. 2010)

35 Miss. Admin. Code Pt. 101, R. 4.3 Establishment of Official Mailing Address

By statute, regulation and when directed by the Board, the Executive Director is required to mail notices, orders and other documents to parties. Where the party is represented in the administrative appeal, unless requested otherwise in writing, such mailings to the party will be sent to his designated representative. Mailing to a designated representative in an administrative appeal shall constitute mailing and notice to the party represented. There is a presumption that the addressee received such notices, orders and/or documents if mailed to the addressee’s last known address, being the official mailing address that the Executive Director has for the addressee. The process by which this official mailing address is established and changed is as follows:

A. The official mailing address of a person, including, but not limited to, a party or a party’s designated representative, shall be the mailing address for that person appearing on the first document filed with the Executive Director in the administrative appeal containing a mailing address for that person. B. If subsequent to the establishment of an official mailing address, a person wishes to change his official mailing address with the Board in regard to an administrative appeal, the person must file with the Executive Director a written notification of the change of address with the style and docket number of the administrative appeal stated and the phrase “Change of Address” highlighted in the written notification. If this person has appeared in multiple administrative appeals, a separate written notification of change of address is to be filed in each separate administrative appeal. Such change of address will not be effective until filed with the Executive Director in regard to the administrative appeal in which change of address is submitted. As provided in Rule 4.6 below, the party or designated representative filing the written notification of change of address shall serve a copy of such change of address notification on all other parties in the administrative appeal.

History

Source: Miss. Code Ann. § 27-4-3(1)(a) (Rev. 2010)

35 Miss. Admin. Code Pt. 101, R. 4.4 Computation of Time

When an appeal, objection or other document is required by statute, regulation or the Board to be filed with the Executive Director or with the Board within any number of days, the day of the act, event or default from which the designated period of time begins to run shall not be included. The last day of the period so computed shall be included unless it is a Saturday, a Sunday, legal holiday or any other day when the office of the Board is in fact closed, whether with or without legal authority, in which event the period runs until the end of the next day which is not a Saturday, a Sunday, a legal holiday or any other day when the office of the Board is closed. Legal holidays for the Board are found at Miss. Code Ann. § 3-3- 7(1). When the period of time prescribed or allowed is less than seven (7) days, intermediate

Saturdays, Sundays and legal holidays shall be excluded in the computation. Mailing does not constitute filing, and the time period within which the appeal, objection or other document has to be filed is not extended because of mailing.

History

Source: Miss. Code Ann. § 27-4-3(1)(a) (Rev. 2010)

35 Miss. Admin. Code Pt. 101, R. 4.5 Filing of Documents with the Board

A. The date of filing of a document required by statute, regulation or the Board to be filed with the Executive Director and/or the Board shall be the date of actual receipt of the document in the office of the Board. The date stamped on the document by the Executive Director or other Board employee as the date received by the Board office shall be considered the date of receipt by the Executive Director and/or the Board. B. Documents received in the office of the Board between the hours of 8:00 a.m. and 5:00 p.m., central time, on a business day will be stamped as received by the Executive Director or other Board employee on that day. Documents sent by electronic transmission will be considered received based on the date and time indicated by the Board’s fax machine or computer for receipt of such electronic transmission. Any electronic transmission which is indicated by the Board’s fax machine or computer to have been received after 5:00 p.m., central time, on a business day or at any time on a Saturday, Sunday, legal holiday or other day on which the Board’s office is closed shall be stamped as received on the next business day. C. If a document is filed with the Executive Director or Board by e-mail, the document, including any exhibits and attachments to the document, shall be attached to the e- mail as a PDF file or a Word file. The use of any other format for attachment of documents to an e-mail is subject to the approval of the Executive Director. D. When a document is filed with the Executive Director or Board by electronic transmission, the original document and such copies of the original which are required to be filed with the original document shall be mailed or hand delivered to the Executive Director no later than the next business day. E. When a party or the party’s designated representative sends a document to the Executive Director and/or the Board for filing, the party shall bear the risk of the method chosen for delivery and/or transmission of the document to the Executive Director and/or to the Board. The failure of a document being actually received by the Executive Director and/or the Board in the Board’s office by the date set for the filing of the document shall not be excused even when caused by an unexpected delay or failure in delivery and/or transmission of the document by the method chosen, including, but not limited to, delays and/or failures to deliver and/or transmit the document by a courier service, the US mail, another delivery service (FedEx, UPS, etc.), fax machine or e-mail. F. Unless otherwise ordered by the Board or directed by the Executive Director, any party filing a document with the Executive Director and/or the Board in regard to an administrative appeal shall file an original and three (3) copies of the document. G. Any document filed with Executive Director and/or the Board shall be in English or an English translation shall be included with any document that is not in English.

History

Source: Miss. Code Ann. § 27-4-3(1)(a) (Rev. 2010)

35 Miss. Admin. Code Pt. 101, R. 4.6 Service of Documents Filed With Board

A. Unless otherwise ordered by the Board or provided by statute or other regulation, a copy of all documents filed with the Executive Director and/or the Board in regard to an administrative appeal shall at the time of filing be served upon every other party to the administrative appeal. B. In regard to a party, other than the Department or the ABC Division, which is not represented in the administrative appeal, service shall be made upon the party. C. In regard to a party, other than the Department or the ABC Division, which is represented in the administrative appeal by a designated representative, service shall be made upon the designated representative. D. In regard to the Department or on the ABC Division, service shall be as follows: 1) Until a party is advised by the Executive Director, the Board, a Department attorney or by a filing in the administrative appeal that the Department or the ABC Division is being represented in the administrative appeal by a specific attorney, service on the Department or the ABC Division shall be made upon the Chief Counsel for the Legal Division of the Department. 2) From and after the point that a party is advised by the Executive Director, the Board, an attorney representing the Department or the ABC Division or by a filing in the administrative appeal that the Department or the ABC Division is being represented in the administrative appeal by a specific attorney, service shall be made upon the attorney representing the Department or the ABC Division in the administrative appeal. E. Service of a document may be made by hand delivery, mail or electronic transmission. Such methods of service shall be accomplished and completed as follows: 1) Service by hand delivery of a document is to be accomplished and completed by the occurrence of one of the following events: (a) Handing a copy of the document being filed to the person being served, or (b) By leaving a sealed envelope containing the document being filed and addressed to the person being served at the office or home of that person. 2) Service by mail of a document is to be accomplished by mailing a copy of the document being filed to the person being served. Service by mail is complete upon mailing. Please note however that under Rules 4.4 and 4.5, filing a document with the Executive Director or the Board is not complete upon mailing. 3) Service by electronic transmission is to be accomplished and completed as follows: (a) Service by electronic transmission is accomplished by faxing a copy of the document being filed to the fax number of the person being served

or by e-mailing a copy of the document being filed to the e-mail address of the person being served. (b) Service by electronic transmission is complete when the electronic equipment being used by the person being served acknowledges receipt of the transmission. If the equipment used by the person being served does not automatically acknowledge receipt of the transmission, service is not complete until the sending party obtains an acknowledgment of receipt of the transmission from the recipient. F. Filing of an executed certificate of service as part of the document being filed with the Executive Director and/or Board setting out the method and date of service shall be prima facie evidence of the service of the document to which it relates.

History

Source: Miss. Code Ann. § 27-4-3(1)(a) (Rev. 2010)

35 Miss. Admin. Code Pt. 101, R. 4.7 Contents of Notices of Appeal or Written Objections Filed with Board

A. An appellant filing a written appeal or objection with the Board is required to use the Notice of Appeal or Objection form available from the Executive Director in filing his appeal or objection. The Notice of Appeal or Objection form is to be filled out completely and executed, and a copy of the action from which the appeal is being taken or to which the objection is being made is to be attached to the form. Typically, the document to be attached would be: 1) From an appeal from the decision of the Review Board, the Review Board Order; 2) From an appeal from the decision of an administrative hearing officer, the order of the administrative hearing officer; 3) From an appeal of a decision of the ABC Division, a copy of the notice received from the ABC Division setting out its revocation or suspension of an ABC permit, ABC manager status and/or qualified resort area or its denial of an application for an ABC permit (issuance, transfer or renewal), ABC manager status and/or qualified resort from which the appeal is being filed; 4) From the proposed disposal of alcoholic beverages or raw materials under Miss. Code Ann. § 67-1-18, a copy of the notice received from the ABC Division setting out the proposed disposal of alcoholic beverages or raw material in regard to which a hearing is being requested ; 5) From an ad valorem assessment, a copy of the ad valorem assessment to which objection is being made; 6) From a decision of the Department concerning the examination of the recapitulation of the ad valorem rolls of a county under Miss. Code Ann. § 27- 35-113, the notice sent by the Department to the president of the Board of Supervisors under Miss. Code Ann. § 27-35-115 setting out the results of the examination; or 7) From a decision of the Department to deny the objection of a Board of Supervisors to the Department’s rejection of an application for homestead exemption, the notice sent by the Department advising the Board of

Supervisors of the Department’s denial of the objection of the Board of Supervisors; B. If the person signing the Notice of Appeal or Objection form is not the appellant, but a designated representative of the appellant, a power of attorney authorizing such person to sign the written appeal or objection on behalf of the appellant, to represent the appellant in the administrative appeal and to receive confidential information and/or documents regarding the administrative appeal is also to be attached to the Notice of Appeal or Objection. C. In addition to those documents required to be attached under subsections A & B above, an appellant may attach to the Notice of Appeal or Objection any other document to support his appeal or objection. D. If an appellant is appealing from multiple orders of the Review Board or of an administrative hearing officer and a separate Notice of Appeal or Objection is not filed for each order being appealed, the Notice of Appeal or Objection form that is filed shall clearly set out the numbers of all orders being appealed and all orders being appealed are to be attached to the Notice of Appeal or Objection that is filed. Any order of the Review Board or of an administrative hearing officer whose number is not set out in the Notice of Appeal or Objection and which is not attached to the Notice of Appeal or Objection will not be considered as having been appealed to the Board and will not be reviewed by the Board. E. This rule does not apply to written objections and requests for hearings initially filed with the ABC Division under Miss. Code Ann. § 67-1-72(5) and (6) to an application for the issuance or transfer of an ABC permit and/or for the declaration of a qualified resort area. The manner and form of such written objections and request for hearing shall be determined by the Department.

History

Source: Miss. Code Ann. § 27-4-3(1)(a) (Rev. 2010)

35 Miss. Admin. Code Pt. 101, R. 4.8 Incomplete Notices of Appeal or Written Objections

A. If an appellant files a timely written appeal or objection but such appeal or objection is not on the required Notice of Appeal or Objection form, does not provide the information and attachments as set out on the Notice of Appeal or Objection form and/or is not filed with the appropriate number of copies, the Executive Director may notify the appellant of the deficiency in his filing and grant the appellant fifteen (15) days from the filing date of the incomplete appeal or objection to file the appeal or objection on the proper form and/or to provide the information, attachments or copies missing from the original appeal or objection. B. Upon written request, the Executive Director may for good cause shown grant an extension not exceeding fifteen (15) additional days of the time period set out in subsection A. C. Failure of an appellant to timely complete the appeal or objection within the time provided may result in the Board determining that the appeal or objection should be dismissed as untimely or considered involuntarily withdrawn.

History

Source: Miss. Code Ann. § 27-4-3(1)(a) (Rev. 2010)

35 Miss. Admin. Code Pt. 101, R. 4.9 Changes in Appellant’s Identity, Structure and/or Ability to Pursue Appeal or Objection

An appellant and/or his designated representative, if any, while the Appeal or Objection is pending before the Board or during any appeal from the order of the Board to Court, is to advise the Executive Director of any changes in the identity, structure, interest and/or ability of the appellant to pursue the appeal or objection, including, but not limited to, the following:

A. Change in name of the appellant by marriage, divorce, adoption, judicially, corporate filing or any other method; B. Divorce between appellants who were married at the time of filing the appeal or objection; C. Change in trade name of the appellant; D. Change in the structure of the appellant, including, but not limited to, merger, liquidation or change in type of entity (i.e. corporation to limited liability company, limited liability company to limited partnership, etc.); E. Change in ownership of appellant, including, but not limited to, majority ownership of corporate stock, majority ownership of an interest in a limited liability company, or change in the partners of a general or limited partnership; F. Change in interest or ownership of the property or business which is the subject of the appeal, including, but not limited to, ownership of the motor vehicle or manufactured housing involved in an appeal concerning the title to same, or ownership of the business for which the ABC permit, other permit or license which is the subject of the appeal was issued or for which application was denied; G. Cessation of the business or activity of appellant for which the ABC permit, ABC manager status, other permit or license which is the subject of the appeal was issued or for which an application was denied; H. Change in authority or ability to pursue the appeal or objection, including, but not limited to, death of an appellant, receivership of the appellant or the filing of bankruptcy by the appellant.

History

Source: Miss. Code Ann. § 27-4-3(1)(a) (Rev. 2010)

35 Miss. Admin. Code Pt. 101, R. 4.10 Time Period for Filing Appeals or Written Objections

A. The time periods in which the written appeals or objections have to be filed with the Executive Director are set out by statute and vary depending on the type of administrative appeal involved. These filing periods are as follows: 1) A written appeal under Miss. Code Ann. § 27-77-5 from a Review Board order, which would involve a tax assessment, a tax refund claim or the denial of a waiver of tag penalty, shall be filed with the Executive Director within sixty (60) days from the date of the Review Board order being appealed; 2) A written appeal under Miss. Code Ann. § 27-77-9 or § 27-77-12 from a Review Board order or from an order of an administrative hearing officer, which would involve a suspension, surrender, seizure or revocation of a permit (excluding ABC permits), IFTA license, IRP registration, IRP credentials, tag or title, shall be filed within thirty (30) days from the date of

the Review Board order or the order of the administrative hearing officer being appealed; 3) A written appeal under Miss. Code Ann. § 27-77-11 from a Review Board order, which would involve the denial of an application for a permit (excluding ABC permits), IFTA license, IRP registration, tag or title, shall be filed within thirty (30) days from the date of the Review Board order being appealed; 4) A written appeal under Miss. Code Ann. § 27-33-41 from the Department’s rejection of the objection of a Board of Supervisors to the Department’s disallowance of homestead exemption application shall be filed within thirty (30) days from the date of the written notice to the Board of Supervisor of the Department’s rejection of the objection of the Board of Supervisors; 5) A written appeal by a Board of Supervisors under Miss. Code Ann. § 27-35- 113 from the decision of the Department regarding the Department’s examination of the recapitulations of the county’s assessment rolls shall be filed with the Executive Director within thirty (30) days from the date of the notice of the results of the Department’s examination as provided for at Miss. Code Ann. § 27-35-115; 6) A written objection under Miss. Code Ann. § 27-35-309, § 27-35-325, § 27- 35-501 or §27-35-703 to an ad valorem assessment shall be filed with the Executive Director within thirty (30) days from the date of the assessment to which the objection is being made; 7) Except as provided in subsection (8) below, a written appeal under Miss. Code Ann. § 67-1-72 from an action of the ABC Division in regard to an ABC permit, ABC manager status, qualified resort area or the disposal of alcoholic beverages or raw materials under Miss. Code Ann. § 67-1-18 shall be filed within fifteen (15) days from the date of receipt of notice of the action being appealed; and 8) A written appeal under Miss. Code Ann. § 67-1-72(4) from the decision of the ABC Division to revoke approval of a qualified resort area where the appellant did not receive written notice of the revocation but was advised of such revocation by publication by the ABC Division or the Department shall be filed with the Executive Director within fifteen (15) days from the date that notice of revocation of approval of the qualified resort area was first published. B. Failure to file with the Executive Director a written appeal or objection within the time periods described above shall result in the order, decision, action or ad valorem assessment becoming final. C. Since a written objection and request for hearing on an application for the issuance or transfer of an ABC permit under Miss. Code Ann. § 67-1-72(5) or on an application for approval of a qualified resort area under Miss. Code Ann. § 67-1-72(6) is initially filed with the ABC Division, any rule concerning the form and time period for filing such written objection and request for hearing is within the authority of the Department to promulgate.

History

Source: Miss. Code Ann. § 27-4-3(1)(a) (Rev. 2010)

35 Miss. Admin. Code Pt. 101, R. 4.11 Voluntary Withdrawals of Administrative Appeals to the Board

A. At any time after an administrative appeal is filed with the Executive Director, the appellant may withdraw his administrative appeal to the Board. B. At any time after a written objection and request for hearing in regard to an ABC permit or a qualified resort area under Miss. Code Ann. § 67-1-71(5) and/or (6) is received by the Executive Director from the ABC Division, the appellant may withdraw his written objection and request for hearing. C. A voluntary withdrawal under subsections A or B above must be in writing or by electronic transmission and filed with the Executive Director. The withdrawal shall clearly state the style of the administrative appeal being withdrawn, including docket number, and be signed by the appellant or his designated representative.

History

Source: Miss. Code Ann. § 27-4-3(1)(a) (Rev. 2010)

35 Miss. Admin. Code Pt. 101, R. 4.12 Involuntary Withdrawals of Administrative Appeals to the Board

A. The failure of an appellant and his designated representative, if any, to appear at a scheduled hearing before the Board on his administrative appeal shall constitute an involuntary withdrawal of the administrative appeal. B. Where an appellant has obtained permission under Miss. Code Ann. § 27-77-5(5) to submit his position in writing or by electronic transmission in lieu of attending the hearing on his administrative appeal from a Review Board order under Miss. Code Ann. § 27-77-5, the appellant’s failure to file such submission with the Executive Director by the date specified for such filing or by the date of the hearing when no date is specified will constitute an involuntary withdrawal of the administrative appeal. C. In addition to the failures set out in subsections A and B above, the Board may also determine that an administrative appeal has been involuntary withdrawn if it finds that any other act or failure committed by the appellant constitutes a failure by the appellant to prosecute his appeal. D. Upon a finding by the Board that an administrative appeal has been involuntary withdrawn, the Board shall note on its minutes the involuntary withdrawal of the administrative appeal and state the basis of the withdrawal.

History

Source: Miss. Code Ann. § 27-4-3(1)(a) (Rev. 2010)

35 Miss. Admin. Code Pt. 101, R. 4.13 Effect of Withdrawal

A. At the point in time when an administrative appeal is withdrawn, whether voluntarily or involuntarily, the action from which the administrative appeal was filed will become final. B. If subsequent to the filing of the administrative appeal, but before the withdrawal, the Department, ABC Division, Review Board or administrative hearing officer amends the order and/or changes the action from which the administrative appeal was filed,

the last order entered and/or action taken will be the order and/or action which will become final upon the withdrawal of the appeal.

History

Source: Miss. Code Ann. § 27-4-3(1)(a) (Rev. 2010)

35 Miss. Admin. Code Pt. 101, R. 4.14 Settings and Notices of Hearings

A. Upon receipt of a completed Notice of Appeal or Written Objection, including receipt from the ABC Division of a written objection and request for hearing under Miss. Code Ann. § 67-1-72 (5) or (6), the Executive Director shall set a hearing before the Board on the administrative appeal. B. The Executive Director may set more than one (1) hearing for the same date and time with such administrative appeals set for the same date and time to be heard based on an order to be determined by the Executive Director or the presiding board member. C. Upon the setting of the hearing, the Executive Director shall mail to all parties to the administrative appeal a written notice giving the date, time and location of the hearing. If after such notice is mailed, the date, time or location of the hearing is changed for any reason, the Executive Director shall mail a written notice to all parties advising them of the change; provided however that if the change occurs within seven (7) days of the date of the previously scheduled hearing, in addition to the written notice, the Executive Director may advise the parties of the change by any means he deem appropriate, including, but not limited to, in person, by telephone, by electronic transmission, or by posting a notice at the previously set location of the hearing.

History

Source: Miss. Code Ann. § 27-4-3(1)(a) (Rev. 2010)

35 Miss. Admin. Code Pt. 101, R. 4.15 Continuances and Extensions of Time

A. A party desiring a continuance of an administrative appeal set for hearing shall file a written request for a continuance with the Executive Director setting out the reasons for the request. Requests filed within ten (10) days from the date of the notice setting the hearing will be routinely granted. Requests filed after this ten (10) day period but more than seven (7) days before the hearing date will only be granted if good cause is shown for the continuance. Requests filed within seven (7) days of the date of the hearing will only be granted in the case of an emergency. B. If a continuance is granted for a hearing in regard to which the Board has incurred a cost because of the original setting, including, but not limited to, a court reporter appearance fee, the Board may assess such costs to the party requesting the continuance. If assessed, the cost must be paid by the party to the Executive Director within fifteen (15) days from the date the continuance was granted. Failure to timely pay such costs shall be considered an involuntary withdrawal of the administrative appeal. C. A party desiring an extension of a time period prescribed by these regulations or by the Board shall file a written request for such extension with the Executive Director and explain the basis for the extension. Such requests may be considered and granted

in whole or in part by the Executive Director. However, no time period set by statute, including, but not limited to, the time period for filing an appeal or objection with the Board or Executive Director and the time period for filing an appeal from the Board to Court, can be extended.

History

Source: Miss. Code Ann. § 27-4-3(1)(a) (Rev. 2010)

35 Miss. Admin. Code Pt. 101, R. 4.16 Consolidations

A. The hearing on a written objection and request for hearing under Miss. Code Ann. § 67-1-72(5) and/or (6) in regard to the application for issuance or transfer of an ABC permit and/or the declaration of an area or locality as a qualified resort area shall be consolidated with the hearing on any timely appeal from the denial by the ABC Division of the issuance, transfer and/or declaration of the ABC permit and/or qualified resort area to which the written objection was made. B. The Executive Director may consolidate two or more administrative appeals for hearing purposes if he determines that the appellants in these administrative appeals are the same person or related persons and have common representation. The Executive Director may also consolidate administrative appeals filed by unrelated appellants if he determines such consolidation will expedite or simplify consideration of the issues in these administrative appeals, and such consolidation will not prejudice a party or violate any confidentiality statutes. C. The Executive Director shall advise all affected parties of the consolidation in writing. Such notification may be included in the notice setting the hearing. Except for the consolidation set out in subsection A above, which is mandated by statute, a party may file a written objection with the Executive Director to the consolidation within ten (10) days from the date of the written notification of the consolidation. Failure to file the written objection within this ten (10) day time period shall constitute consent to the consolidation. D. Administrative appeals may also be consolidated for hearing purposes if all parties to the administrative appeals proposed to be consolidated consent to such consolidation.

History

Source: Miss. Code Ann. § 27-4-3(1)(a) (Rev. 2010)

35 Miss. Admin. Code Pt. 101, R. 4.17 Reasonable Accommodation and Interpreters at a Board Hearing

A. Any party requesting a reasonable accommodation under the Americans with Disabilities Act in regard to attendance and/or participation at a Board hearing shall file a written request for such accommodation with the Executive Director at least five (5) days before the date of the hearing. B. Any request for an interpreter under Miss. Code Ann. § 13-1-303(2) by a party as a deaf person shall be filed in writing with the Executive Director at least five (5) days before the hearing for which the interpreter is requested. C. Except for an interpreter for a deaf party under Miss. Code Ann. § 13-1-303(2), it is the responsibility of a party to provide any interpreter that the party determines is needed to present his argument and/or evidence at any hearing before the Board.

D. When an interpreter is provided at a hearing by the Board or a party, the interpreter shall be available for use at the hearing by all parties in the administrative appeal and the Board members at the cost of the person who provided the interpreter.

History

Source: Miss. Code Ann. § 27-4-3(1)(a) (Rev. 2010)

35 Miss. Admin. Code Pt. 101, R. 4.18 Decorum

The conduct, demeanor and dress of parties, their designated representatives, their witnesses or any other person when present during any hearing or other proceeding before the Board shall reflect respect for the dignity and authority of the Board. The presiding board member may remove or limit the participation of any disruptive person during a hearing or any other meeting of the Board.

History

Source: Miss. Code Ann. § 27-4-3(1)(a) (Rev. 2010)

35 Miss. Admin. Code Pt. 101, R. 4.19 Subpoenas

Any party desiring the issuance of a subpoena to require the attendance of a witness at a hearing before the Board to give testimony and/or to produce and permit inspection of designated books, documents or other tangible thing shall file a written request for the issuance of the subpoena with the Executive Director at least ten (10) days before the date of the hearing for which the subpoena is requested. Upon receipt of the request, the Executive Director will issue the subpoena and return it to the party requesting same. The party requesting the subpoena will be responsible for service of the subpoena and such service shall be performed in accordance with the method for service of subpoenas under Rule 45(c) of the Mississippi Rules of Civil Procedure with the exception that proof of service of the subpoena shall be filed with the Executive Director.

History

Source: Miss. Code Ann. § 27-4-3(1)(a) (Rev. 2010)

35 Miss. Admin. Code Pt. 101, R. 4.20 Pre-hearing Production of Documents

Upon request or on its own initiative, the Board may require a party to provide the other party in the administrative appeal with a copy of all documents which he intends to provide to the Board in the presentation of his case at the hearing before the Board. Failure to timely provide the other party with a copy of such documents when required to do so may be found by the Board to be an involuntary withdrawal of the administrative appeal or the Board may determine that such documents should not be considered by it in the administrative appeal. In each appeal, when applicable, the Department shall provide the Board and, if it has not already done so, the other party, with copies of all applicable Review Board orders, Review Board minutes, assessments, and audit reports including auditor comments.

History

Source: Miss. Code Ann. § 27-4-3(1)(a) (Rev. 2010)

35 Miss. Admin. Code Pt. 101, R. 4.21 Finding of Facts, Conclusions of Law and Briefs

At any time prior to the issuance of a final order in an administrative appeal covered by this chapter, the Board may request the parties to file proposed Findings of Fact and Conclusions of Law and/or file briefs on issues raised in the administrative appeal. When such a request is made, the Board will set the date by which such proposed Findings of Fact and Conclusions of Law and/or briefs are to be filed with the Executive Director in the administrative appeal.

History

Source: Miss. Code Ann. § 27-4-3(1)(a) (Rev. 2010)

35 Miss. Admin. Code Pt. 101, R. 4.22 Orders of the Board

A. After a hearing has been held before the Board on an administrative appeal, the Board may verbally announce its decision in the administrative appeal at the end of the hearing or take the matter under advisement for a decision at a later time. B. After the Board has made a decision, even when that decision is announced at the hearing, the Board shall issue a written order. The written order will be the formal decision of the Board in the administrative appeal and shall be executed by a majority of the members participating in the decision. C. The Board may elect to uphold the assessment or action, to amend the assessment, to issue a revised assessment, to order the Department to issue a refund or credit, to remand the issue to the Review Board or originating division for further work, or any other action it deems appropriate. The order shall set out the action taken and the basis for such action. D. Any time period for appealing from a decision of the Board to Court will run from the date of the written order. If the written order of the Board is amended for any reason during the time period for appealing the order to Court, but before an appeal from the order is actually filed in Court, the time period for appealing the Board’s decision in the administrative appeal will then run from the date of the amended order. Up to the earlier of the date that the time period for filing an appeal from the order to Court expires or the date that an appeal of the order is actually filed in Court, the Board retains the authority to withdraw its order and return the administrative appeal to its docket for further consideration and decision. If this occurs, the order withdrawn will no longer be the final order of the Board in the administrative appeal and will not be appealable to Court. When an appeal from an order is timely and appropriately filed in Court, the Board no longer has jurisdiction or authority to change its written order, unless or until the order is remanded back to the Board by a Court. E. If the time period for appealing the Board’s decision to Court has expired with no timely and appropriate appeal being filed in Court and the order has not been withdrawn by the Board, the decision of the Board will become final and shall not be subject to further review by the Board or any Court. F. Any appeal from a Board order under Miss. Code Ann. § 67-1-39 regarding an ABC matter shall be without supersedeas, which means any Board order regarding an ABC matter will go into effect on the date of the order and shall remain in effect unless and until it is overturned in a judicial appeal by a Court in a final non-appealable order. The Board does however retain authority, as set out in subsection D above, to amend or withdraw an order up to the earlier of the date that the time period for filing an appeal from the order to Court expires or the date that an appeal of the order is actually filed in Court. G. The Executive Director shall mail a copy of the written order entered in an administrative appeal to all parties in the administrative appeal.

History

Source: Miss. Code Ann. § 27-4-3(1)(a) (Rev. 2010)

35 Miss. Admin. Code Pt. 101, R. 4.23 Time Periods and Conditions for Appealing to Court and Notice to Executive Director of an Appeal

A. The time period for appealing from an order of the Board to Court varies depending on the type of administrative appeal involved. The time periods as set out by statute for these appeals are as follows: 1) An appeal under Miss. Code Ann. § 27-77-7 from a Board order involving a tax assessment, a tax refund claim or the denial of a waiver of tag penalty shall be filed within sixty (60) days from the date of the Board order being appealed; 2) An appeal under Miss. Code Ann. § 27-77-13 from a Board order involving the denial, suspension, surrender, seizure or revocation of a permit, IFTA license, IRP registration, IRP credentials, tag or title, shall be filed within thirty (30) days from the date of the Board order being appealed; 3) An appeal under Miss. Code Ann. § 27-35-163 from a Board order involving a written objection under Miss. Code Ann. § 27-35-309, § 27-35-325, § 27- 35-501 or §27-35-703 to an ad valorem assessment shall be filed within thirty (30) days from the date of the order of the Board order being appealed; 4) An appeal under Miss. Code Ann. § 67-1-39 from a Board order regarding an action taken under the ABC law shall be filed within thirty (30) days from the date of the Board order being appealed. B. The court and county in which an appeal from the Board is to be filed also varies depending on the type of order being appealed and the type of party filing the appeal. A party appealing from the order of the Board is advised to consult the statute under which he is appealing to determine in what Court (chancery or circuit) and in what county he is required to file his appeal. C. In addition to timely filing an appeal in the appropriate Court, a party appealing from an order of the Board may, by statute, also be required to perform other acts within the period for filing the appeal or prior to filing his petition in Court, including, but not limited to, posting a bond, paying the uncontested portion of a tax, paying the tax under protest in lieu of posting a bond, or paying the estimate of the cost of preparing the entire record before the Board. A party appealing from the order of the Board is advised to the consult the statute under which he is appealing to determine what other acts he is required to perform and when to properly and timely appeal from the order of the Board to Court. D. Any party appealing from an order of the Board to Court shall mail to the Executive Director a copy of his written appeal to Court to place the Board on notice of the pendency of the appeal and to insure that the Executive Director maintains all records regarding the administrative appeal pending a final decision by the Court.

History

Source: Miss. Code Ann. § 27-4-3(1)(a) (Rev. 2010)

35 Miss. Admin. Code Pt. 101, R. 4.24 Conferences

As soon as possible after the filing of an appeal and as often as necessary thereafter, each party to the appeal shall confer with the other party or parties to the appeal for the purpose of narrowing the issues to be decided so that, at the time of the hearing before the

Board, the issues to be decided will be well defined and the only remaining issues will be those that are truly intractable and require a decision by the Board.

History

Source: Miss. Code Ann. § 27-4-3(1)(a) (Rev. 2010)

Chapter 5 Procedure for Administrative Appeals Involving Appeals from Review Board Orders under Miss. Code Ann. § 27-77-5 and Written Objections to Ad Valorem Assessments

35 Miss. Admin. Code Pt. 101, R. 5.1 Administrative Appeals Covered By This Chapter

There are several administrative appeals to the Board where by statute this Board is prohibited from making an official transcript, the judicial review of the Board’s decision will be heard de novo and/or the appeal to Court involves a full evidentiary judicial hearing. This Chapter sets out the procedure to be followed in those types of administrative appeals. Specifically, this Chapter applies to the following administrative appeals:

A. Any appeal under Miss. Code Ann. § 27-77-5 from an order of the Review Board to the Board; B. Any written objection filed with the Executive Director pursuant to Miss. Code Ann. § 27-35-309(2)(a) and § 27-35-311(2) to an ad valorem assessment by the Department regarding railroads or other public service companies under Miss. Code Ann. § 27-35-309(1); C. Any written objection under Miss. Code Ann. §27-35-325 to an ad valorem assessment issued by the Department on property of railroads or other public service companies escaping taxation; D. Any written objection under Miss. Code Ann. § 27-35-517 filed with the Executive Director to railcar assessments by the Department under Miss. Code Ann. § 27-35- 501; and E. Any written objection under Miss. Code Ann. § 27-35-703 to an ad valorem assessment by the Department of aircraft under that statute.

History

Source: Miss. Code Ann. § 27-4-3(1)(a) (Rev. 2010)

35 Miss. Admin. Code Pt. 101, R. 5.2 Method and Standard for Presentation of Evidence at Hearings

A. Since an official transcript is not made of the hearing of an administrative appeal covered by this Chapter and any judicial review of the decision of the Board in an administrative appeal covered by this Chapter will be heard de novo and/or involve a full evidentiary judicial hearing before a Court and in order to streamline the hearing process, presentation of evidence before the Board in an administrative appeal covered by the Chapter is not required to be by examination of witnesses. Parties may present evidence through an oral presentation, written presentation and/or by the introduction of documentary evidence. B. If a party does present evidence to the Board through examination of a witness, the witness shall be sworn in by the presiding board member.

C. The Mississippi Rules of Evidence will apply at hearings held in the administrative appeals covered by this Chapter, but they will be relaxed. Relevant hearsay evidence may be presented unless the presiding board member determines that such evidence lacks trustworthiness. D. If a party presents evidence to the Board through witnesses, any other party to the administrative appeal will be entitled to cross-examine such witnesses. E. Any board member may ask questions of any party, witness or other person who is present at the hearing. When such questioning occurs, each party to the administrative appeal will be given the opportunity to also question such party or person, but such questioning shall be limited to the area of examination by the board member. The order of such questioning will be determined by the presiding board member. F. Any party presenting a document to the Board for consideration shall provide all other parties to the administrative appeal with a copy of the document before or at the time of presentation of the document to the Board and shall have sufficient copies of the document at the hearing to allow at least four (4) copies of the document to be left with the Board. G. The Board may also take official notice of the following without the presentation of additional evidence: 1) Records and files maintained by the Board; 2) Tax returns, tax reports and related documents filed with the Department for or on behalf of the appellant or any affiliated company; and 3) Any fact that may be judicially noticed by the courts of this state. H. Even though an official transcript is not made of the hearings in the administrative appeals covered by this Chapter, the Executive Director may make an audio and/or video recording of the hearing. When such recording is made, a party may obtain a copy of the recording from the Executive Director on the prepayment of the cost of the copy. In the case of a request for a copy of the recording by the Department, the Executive Director shall waive payment of this cost. I. To avoid unnecessary disruption and delays during the hearing, if the Executive Director makes a recording of a hearing in an administrative appeal covered by this Chapter, a party will not be allowed to record the hearing by any means, including, but not limited to, an audio recording, video recording or transcription by a court reporter. J. If the Executive Director does not make a recording of a hearing in an administrative appeal covered by the Chapter, but a recording is made by one of the parties to the administrative appeal, a copy of the recording will be provided by this party to any other party in the administrative appeal and/or the Executive Director upon request and payment of the cost of copying the recording.

History

Source: Miss. Code Ann. § 27-4-3(1)(a) (Rev. 2010)

35 Miss. Admin. Code Pt. 101, R. 5.3 Burden of Proof

In any administrative appeal covered by this Chapter, the burden of proof shall be on the appellant to prove that the action of the Department is incorrect.

History

Source: Miss. Code Ann. § 27-4-3(1)(a) (Rev. 2010)

35 Miss. Admin. Code Pt. 101, R. 5.4 Order of Presentation at Hearings

Unless otherwise directed by the presiding board member, a hearing in an administrative appeal covered by this Chapter shall be conducted in the following order:

History

Source: Miss. Code Ann. § 27-4-3(1)(a) (Rev. 2010)

35 Miss. Admin. Code Pt. 101, R. 5.5 Presentation of Evidence to the Board after Hearings

A. After the hearing has been concluded, no additional factual evidence shall be presented to the Board except under the following circumstances: 1) If during the hearing, it was agreed or ordered that such additional evidence could be presented at a later time; 2) The Board or the Executive Director on behalf of the Board requests such additional evidence; 3) All parties to the administrative appeal agree to presentation of the additional evidence to the Board; or 4) After motion and hearing, the Board determines that there is good cause for a party to be allowed to submit such additional evidence. B. Any evidence permitted to be filed with the Board after the hearing has been concluded as set out above shall at the time of filing also be served on all other parties to the administrative proceedings. Any other party to the administrative appeal will be given seven (7) days from the date of service of the additional evidence to file evidence with the Board in response to such additional evidence. C. This Rule does not apply to the Department providing the Executive Director with computations under Rule 5.7 below.

History

Source: Miss. Code Ann. § 27-4-3(1)(a) (Rev. 2010)

35 Miss. Admin. Code Pt. 101, R. 5.6 Written or Electronic Submissions in Lieu of Appearances

A. An appellant in an administrative appeal covered by this Chapter may request to submit his position to the Board of Tax Appeals in writing or by electronic transmission in lieu of appearing at a hearing on the appeal. B. Any request by an appellant to submit his position to the Board in writing or by electronic transmission in lieu of appearance at a hearing shall be made in writing and filed with the Executive Director. C. The Executive Director shall consider such request for written or electronic submission in lieu of appearance and advise the parties to the administrative appeal of his decision as to whether the request should be granted. If granted, the Executive Director should state in such notice the date by which appellant’s written or electronic submission is to be filed with the Board. If no date is stated, the deadline for filing the written or electronic submission will be the date the administrative appeal is set for hearing before the Board. D. An appellant’s request to submit his position in writing or by electronic transmission shall be considered to be a voluntary waiver by the appellant of his right to appear before the Board in person and shall constitute his consent to have his administrative appeal decided without a hearing if the Department also consents to the Board’s consideration of the administrative appeal without a hearing as set out in subsection E below. E. If a request by an appellant to submit his position in writing or by electronic transmission in lieu of appearance is granted, the Department may also consent to submit its position to the Board in writing or by electronic transmission and have the administrative appeal considered and decided without a formal hearing. Upon receipt of such a written consent by the Department, the Executive Director will advise all parties in writing of the date by which the written or electronic submissions of the parties are to be filed with the Board. F. If a request by appellant to submit his position in writing or by electronic transmission in lieu of appearance is granted and the appellant fails to file his written or electronic submission with the Board by the date set for such filing, this failure shall constitute an involuntary withdrawal of an appeal by the appellant as set out in Rule 4.12(B) above.

History

Source: Miss. Code Ann. § 27-4-3(1)(a) (Rev. 2010)

35 Miss. Admin. Code Pt. 101, R. 5.7 Requests for Computations and/or Additional Information

Where the Board determines that a revised computation of the amount of tax and/or overpayment in issue is needed by the Board in its consideration of the administrative appeal covered by this Chapter, the Executive Director may request such computation from the Department. Such requests and the responses thereto may be made in person, by telephone, by electronic transmission or in writing.

History

Source: Miss. Code Ann. § 27-4-3(1)(a) (Rev. 2010)

Chapter 6 Procedure for Administrative Appeal Involving Appeals Where the Hearing before the Board is Transcribed

35 Miss. Admin. Code Pt. 101, R. 6.1 Administrative Appeals Covered by Chapter

Besides those administrative appeals covered by Chapter 5 above, the Board is also charged with hearing a number of other types of administrative appeals from actions by the Department or the ABC Division which do not involve major tax matters and in regard to which the Board is not prohibited from making an official transcript and the judicial review of the Board’s decision will be based on the record before the Board. In these administrative appeals, a complete record of the administrative appeal and of any hearings before the Board in the administrative appeal shall be created and maintained, including the taking down of any testimony at the hearing by a court reporter. This Chapter sets out the procedure to be followed in these types of administrative appeals involving record hearings. Specifically, this Chapter applies to the following administrative appeals:

A. Any appeal from an order of the Review Board or administrative hearing officer regarding the suspension, surrender, seizure and/or revocation of a permit, IFTA license, IRP credential, IRP registration, tag, motor vehicle title or manufactured housing title; B. Any appeal from a Review Board order regarding the denial of a permit, IFTA license, IRP credential, IRP registration, tag, motor vehicle title or manufactured housing title; C. Any appeal from a decision of the ABC Division to revoke or suspend an ABC permit, qualified resort area or ABC manager status; D. Any appeal from a decision of the ABC Division to deny an application for the issuance, transfer or renewal of an ABC permit; E. Any hearing on a written objection and request for a hearing regarding an application for issuance or transfer of an ABC permit; F. Any appeal from a decision of the ABC Division to deny the application for a qualified resort area; G. Any written objection and request for a hearing regarding an application for a qualified resort area; H. Any appeal from a decisions of the ABC Division to deny an application for ABC manager status; I. Any written request for a hearing on the proposed disposal of alcoholic beverages or raw materials under Miss. Code Ann. § 67-1-18; J. Any appeal from a decision of the Department under Miss. Code Ann. § 27-33-41(i) to deny the objection of a board of supervisors to the Department’s rejection of an application for homestead exemption; and K. Any appeal from a decisions of the Department regarding examination of the recapitulation of the assessment rolls of a county under Miss. Code Ann. § 27-35-113.

History

Source: Miss. Code Ann. § 27-4-3(1)(a) (Rev. 2010)

35 Miss. Admin. Code Pt. 101, R. 6.2 Method and Standard for Presentation of Evidence at Record Hearings before the Board

A. Since an official transcript is to be made of the hearing of an administrative appeal covered by this Chapter, the Board will only consider the testimony and documents

introduced into evidence at the hearing, the facts and documents stipulated to by the parties and the facts of which it can take judicial notice. B. Except as provided in subsection C below, stipulations of fact entered into by the parties, if in writing, shall be introduced as an exhibit at the hearing before the Board, but if not in writing, shall be stated at the hearing and taken down by the court reporter as part of the record of the hearing. C. If an administrative appeal is submitted to the Board without a formal hearing based solely on the stipulations of the parties, the stipulation shall be signed by both parties with any stipulated documents attached and identified by exhibit numbers and the original signed stipulation with documents attached will be filed with the Executive Director. D. If a party offers testimony at a hearing through the examination of a witness or where a party representing himself testifies at the hearing by making a statement, the person so testifying shall be sworn in by the presiding board member or the court reporter. Any other party to the administrative appeal shall be entitled to cross-examine the person testifying and any board member may ask questions of this person. E. If a board member asks questions after the examination of the person by the parties has been completed, the parties to the administrative appeal will be given the opportunity to also question the person, but such questioning shall be limited to the area of examination by the board member. The order of such questioning will be determined by the presiding board member. F. The Mississippi Rules of Evidence will apply at hearings held in the administrative appeals covered by this chapter, but they will be relaxed. Relevant hearsay evidence may be presented and introduced into evidence unless the presiding board member determines that such evidence lacks trustworthiness. G. If the Department or the ABC Division determines after the action or order from which the administrative appeal was filed that there are additional and/or different facts and/or charges on which to base the order or action being appealed, these additional and/or different facts and/or charges may be used by the Department or the ABC Division in an administrative appeal under this Chapter to support its order and/or action, if the Department or the ABC Division provides the appellant with reasonable notice of such facts and charges before the hearing in the administrative appeal. H. Any party offering a document into evidence at the hearing before the Board in an administrative appeal covered by this Chapter shall provide all other parties to the administrative appeal and the Executive Director with a copy of the document before or at the time that the document is offered into evidence. I. The Board may also take judicial notice of the following without the introduction of additional evidence: 1) Records and files maintained by the Board; and 2) Any fact that may be judicially noticed by the courts of this state. J. If it is determined that the testimony of witnesses at the hearing shall be repetitive and limiting such repetitive testimony will not prejudice a party in the administrative appeal, the Executive Director, prior to a hearing, or the presiding board member, at the hearing, may direct the party or parties offering such repetitive testimony to limit the number of witnesses testifying to the same matter.

History

Source: Miss. Code Ann. § 27-4-3(1)(a) (Rev. 2010)

35 Miss. Admin. Code Pt. 101, R. 6.3 Burden of Going Forward and Ultimate Burden of Persuasion

In any administrative appeal covered by this Chapter, the Department or the ABC Division shall have the burden of going forward to present a prima facie case of the validity of the action taken. The appellant shall have the ultimate burden of persuasion to prove that the action taken by the Department or the ABC Division was:

A. Arbitrary or capricious; B. Not supported by any substantial evidence; C. Beyond the power of the Department or the ABC Division to make; or D. In violation of some statutory or constitutional right of the appellant.

History

Source: Miss. Code Ann. § 27-4-3(1)(a) (Rev. 2010)

35 Miss. Admin. Code Pt. 101, R. 6.4 Order of Presentation at Hearings

Unless otherwise directed by the presiding board member, a hearing in an administrative appeal covered by this Chapter shall be conducted in the following order:

A. The presiding board member shall call the hearing to order; B. The presiding board member, the Executive Director or other employee of the Board shall state the style of the administrative appeal being heard, the nature of the administrative appeal and a summary of the decision or action from which the administrative appeal was filed; C. The presiding board member or the court reporter shall swear in all witnesses, including any party, who expect to testify at the hearing; D. If requested by a party or upon the presiding board member’s own initiative, all witnesses shall be excluded from the hearing room to a location where they cannot hear the testimony of other witnesses in the hearing, except for those witnesses who are either a natural person who is a party to the administrative appeal or an officer or employee of a party which is not a natural person and who has been designated by the party’s attorney to be the party’s representative at the hearing; E. Any stipulation of facts and/or documents between the parties shall be admitted into evidence; F. Each party shall be given the opportunity to make an opening statement; G. The Department or the ABC Division shall present its evidence; H. If the administrative appeal involves a written objection and request for hearing in regard to an application for issuance or transfer of an ABC permit and/or an application for a qualified resort area, the party filing such written objection and request for hearing shall present his evidence; I. If the administrative appeal involves multiple written objections and requests for hearing in regard to an application for issuance or transfer of an ABC permit and/or an application for a qualified resort area, the presiding hearing officer shall determine the order in which such objectors shall present their evidence;

J. The appellant who filed the written appeal with the Executive Director initiating the administrative appeal and/or is the applicant for the ABC permit or qualified resort area to which the written objection and request for hearing referred to in subsection H was filed shall present his evidence; K. Upon request by a party and only on approval and subject to any restrictions of the presiding board member, the parties may be allowed to present additional evidence after the close of the appellant’s case; L. Each party shall be given the opportunity to make a closing argument; and M. Upon conclusion of all arguments and evidence, the presiding board member shall bring the hearing to a close.

History

Source: Miss. Code Ann. § 27-4-3(1)(a) (Rev. 2010)

35 Miss. Admin. Code Pt. 101, R. 6.5 Rule 6.5

Written or Electronic Submissions in Lieu of Appearances not Permitted, but Submission of Administrative Appeals on Stipulation Allowed.

A. Since the administrative appeals covered by this Chapter require that a record be made of the hearing before the Board, an appellant may not request to submit his position to the Board of Tax Appeals in writing or by electronic transmission in lieu of appearing at a hearing on the appeal. The failure of an appellant and his designated representative, if any, to appear at the hearing shall constitute an involuntary withdrawal of the administrative appeal under Rule 4.12(B) above. B. Notwithstanding subsection A above, if all parties to an administrative appeal under this Chapter stipulate to the facts and documents in the administrative appeal, the parties may request that the administrative appeal be submitted to the Board on such stipulation. The filing with the Executive Director of such a request signed by all parties shall constitute a waiver by all parties to a formal record hearing before the Board. If granted, the Executive Director shall set the dates by which the stipulation of facts and documents signed by all parties is to be filed and the date by which the written arguments of the parties are to be filed. In such administrative appeal covered by this Chapter which is submitted on a stipulation, the Board’s consideration of the facts in this appeal will be limited to those facts set out in the stipulation and in the stipulated documents and any facts of which it can take judicial notice under Rule 6.2(I) above. C. The stipulation and the stipulated exhibits filed with the Executive Director in an administrative appeal submitted to the Board on a stipulation as set out in subsection B above shall constitute the record made before the Board in the administrative appeal.

History

Source: Miss. Code Ann. § 27-4-3(1)(a) (Rev. 2010)

35 Miss. Admin. Code Pt. 101, R. 6.6 Payment of Cost for Preparation of the Record on Appeal

. A. Any appellant appealing from an order of the Board to Court in regard to an administrative appeal covered by this Chapter, before filing his appeal in Court, shall pay to the Executive Director the amount of the estimate provided by the Executive

Director to the appellant of the cost of preparing the entire record of the administrative appeal before the Board. B. If upon preparation of the record, it is determined that the actual cost of preparation is different than the amount of the estimate, the Executive Director shall provide the appellant with notice, in writing, of any deficiency or shall refund to the appellant any overpayment. The appellant is to pay the deficiency within thirty (30) days from the date of the notice of the deficiency. Failure of an appellant to pay the estimate before filing his appeal or to pay the deficiency within the thirty (30) days provided may result in his appeal to Court being dismissed with prejudice. C. If the Department or the ABC Division appeals from an order of the Board to Court in regard to an administrative appeal covered by this Chapter, the Executive Director, after preparation of the record, shall bill the Department or the ABC Division with the cost of such record preparation or a proportional share of such cost if the appellant also appealed from the Board order. When billed, the Department or the ABC Division shall promptly pay the cost of preparation of the record, but the Department or the ABC Division will not be required to pay the estimate of the cost of preparation of the record before filing an appeal to Court.

History

Source: Miss. Code Ann. § 27-4-3(1)(a) (Rev. 2010)

MISSISSIPPI DEPARTMENT OF REVENUE MISSISSIPPI DEPARTMENT OF REVENUE

Part 1 Administrative

35 Miss. Admin. Code Pt. 1, R. 100 General

35 Miss. Admin. Code Pt. 1, R. 101 Rule 101

This Regulation is promulgated under the authority and requirements of the Mississippi Administrative Procedures Law.

35 Miss. Admin. Code Pt. 1, R. 102 Rule 102

This Regulation shall apply to all matters falling within the jurisdiction of the Mississippi Department of Revenue and the Commissioner except to the extent the laws of the State of Mississippi provide otherwise. This Regulation is in addition to and supplements those statutory provisions which may be applicable.

35 Miss. Admin. Code Pt. 1, R. 103 Rule 103

The Department of Revenue regulates most tax matters in the State of Mississippi. The Department’s responsibilities also include regulating alcoholic beverages, medical cannabis dispensaries, property taxes, motor vehicle tags and titles, issuing permits, and certain business registrations. The Department and Commissioner interpret the statutes that they are charged to administer and enforce. 104 The Mississippi Department of Revenue is statutorily responsible for the majority of revenue collection activities for the State. The core functional duties of the Department are identified as follows: 1. Tax administration. 2. Compliance enforcement. 3. Wholesale distribution of alcoholic beverages. 4. Enforcement of local option and prohibition laws. 5. Ensuring equalization of statewide property appraisal. 6. Administration of motor vehicle and title laws. 7. Licensing, inspection, and oversight of medical cannabis dispensaries.

35 Miss. Admin. Code Pt. 1, R. 105 (Reserved)

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35 Miss. Admin. Code Pt. 1, R. 200 Definitions

35 Miss. Admin. Code Pt. 1, R. 201 Rule 201

“The Department” means the various offices, bureaus, and divisions of the Mississippi Department of Revenue that carry out the functional duties and responsibilities of the Commissioner as authorized by law.

35 Miss. Admin. Code Pt. 1, R. 202 Rule 202

“Board of Tax Appeals” means the three-member appellate body as legally constituted and authorized by statute to hear appeals of Review Board decisions and certain other decisions and actions by the Department.

35 Miss. Admin. Code Pt. 1, R. 203 "Commissioner" means the Commissioner of the Department of Revenue

35 Miss. Admin. Code Pt. 1, R. 204 Rule 204

"Denial" means the final decision of the Department staff to deny the claim, request for waiver, or application being considered. In this context, the Review Board staff is not included in the Department staff. Denial does not mean the act of returning or refusing to consider a claim, request for waiver, or application for permit, title, or tag by the Department staff due to a lack of information and/or documentation unless the return or refusal is in response to a representation by the person who filed the claim, request for waiver, or application in issue that the missing information and/or documentation cannot or will not be provided.

35 Miss. Admin. Code Pt. 1, R. 205 Rule 205

“Executive Director” means the Executive Director of the Board of Tax Appeals.

35 Miss. Admin. Code Pt. 1, R. 206 Rule 206

“Hearing Officer” means an individual selected by the Chairman of the Review Board from a pool of qualified individuals designated by the Commissioner to serve as administrative hearing officers to conduct a hearing on an appeal of a notice of intent to suspend, surrender, seize or revoke a permit, tag, title, IFTA license or IRP registration.

35 Miss. Admin. Code Pt. 1, R. 207 Rule 207

“IFTA License” means a permit, license, or decal that the Department is authorized to issue or revoke under the Interstate Commercial Carriers Motor Fuel Tax Law or the International Fuel Tax Agreement.

35 Miss. Admin. Code Pt. 1, R. 208 Rule 208

“IFTA Licensee” means a person holding the IFTA license, applying for an IFTA license, or renewing an IFTA license.

35 Miss. Admin. Code Pt. 1, R. 209 Rule 209

“IRP Registration” means the registration of a vehicle under the provisions of the International Registration Plan.

35 Miss. Admin. Code Pt. 1, R. 210 Rule 210

“IRP Registrant” means a person in whose name a vehicle or vehicles are registered under the provisions of the International Registration Plan.

35 Miss. Admin. Code Pt. 1, R. 211 Rule 211

“IRP Credentials” means the cab card and license plate issued by the Commissioner or Department in accordance with the International Registration Plan.

Page 3 of 39

35 Miss. Admin. Code Pt. 1, R. 212 Rule 212

"Last known address," when referring to the mailing of a notice of intent to suspend, revoke or order the surrender and/or seizure of the permit, IFTA license, IRP registration, IRP credentials, tag or title, or to the mailing of a denial of a permit, IFTA license, IRP registration, tag or title, means the official mailing address of the person to whom the notice is being sent as the address appears in the record of the Department. “Last known address,” when referring to the mailing of an assessment, warrant, offset notice, statement of account, and other tax notices and letters, means the official mailing address of the taxpayer to whom the notice is being sent as the address appears in the record of the Department. The official mailing address is typically the address from the taxpayer’s most recently filed and properly processed tax return unless the Department has received clear and concise notification of a different address. All other references to the last known address mean the official mailing address that a hearing officer or the Review Board has on file for the addressee in connection with their appeal. The addressee is presumed to have received any document or item mailed to their last known address. It is the responsibility of the addressee to make sure that the last known address or official mailing address on file with the Department and the Review Board is correct.

35 Miss. Admin. Code Pt. 1, R. 213 Rule 213

"Mail,” "mailed," or "mailing" means placing a document or item in First Class United States Mail, postage prepaid, addressed to the person to whom the document or item is to be delivered at the last known address of that person. Where a person is represented by a representative in an administrative appeal before a hearing officer or the Review Board, the terms "mail,” "mailed," or "mailing" shall also mean placing the document or item referred to in First Class United States Mail, postage prepaid, to the last known address of that person's representative. Mailing to the representative of a taxpayer, permittee, IFTA licensee, IRP registrant, tag holder, or title interest holder shall constitute mailing and notice to the taxpayer, permittee, IFTA licensee, IRP registrant, tag holder, or title interest holder.

35 Miss. Admin. Code Pt. 1, R. 214 Rule 214

“Permit" means a type of license or permit that the Department is authorized to issue, suspend, or revoke, such as a sales tax permit, beer permit, tobacco permit, dealer license, or designated agent status, but does not include: (i) any type of permit issued under the Local Option Alcoholic Beverage Control Law, Miss. Code Ann. Section 67-1-1 et seq, or under the Mississippi Native Wine Law of 1976, Miss. Code Ann. Section 67-5-1 et seq. The Mississippi Native Spirit Law, Miss. Code Ann. Section 67-11-1; (ii) an IFTA license; (iii) an IRP registration, including the IRP credential issued as a result of IRP registration, or (iii) a license issued to a medical cannabis dispensary issued under the Mississippi Medical Cannabis Act per Miss. Code Ann. Sections 41-137-1 through 41-137-9.

35 Miss. Admin. Code Pt. 1, R. 215 Rule 215

"Permittee" means a person holding a permit, applying for a permit, or renewing a permit.

35 Miss. Admin. Code Pt. 1, R. 216 Rule 216

"Person" means a natural person, partnership, limited partnership, corporation, limited liability company, estate, trust, association, joint venture, other legal entity, or other group or combination acting as a unit and includes the plural as well as the singular in number. Person includes the State, counties, municipalities, other political subdivisions, and any agencies, institutions, or instrumentalities thereof, but only when used in the

Page 4 of 39

context of a taxpayer, permittee, IFTA licensee, IRP registrant, tag holder, or title interest holder, or in the context of a person requesting guidance, oral advice, a letter ruling or a declaratory opinion.

35 Miss. Admin. Code Pt. 1, R. 217 Rule 217

"Refund Claim" means a claim made in writing by a taxpayer and received by the Department, wherein the taxpayer indicates that he overpaid taxes to the Department and requests a refund of the overpayment and/or a credit against current or future taxes.

35 Miss. Admin. Code Pt. 1, R. 218 Rule 218

"Representative" or “designated representative” means an individual who represents a person in an administrative appeal before a hearing officer of the Department or before the Review Board. The representative must obtain from the person being represented a written Power of Attorney authorizing the representative to appear on that person’s behalf unless that person is also present.

35 Miss. Admin. Code Pt. 1, R. 219 Rule 219

"Resident" when a taxpayer or petitioner, means a natural person whose residence and place of abode are within the State of Mississippi.

35 Miss. Admin. Code Pt. 1, R. 220 Rule 220

"Review Board" means the Board of Review as legally constituted and authorized by statute and comprised of those qualified employees appointed by the Commissioner of the Department of Revenue.

35 Miss. Admin. Code Pt. 1, R. 221 Rule 221

"Tag" means a type of license tag or plate for a motor vehicle or trailer that the Department is authorized to issue or approve for issuance under the Motor Vehicle Privilege Tax Law, Miss. Code Ann. Sections 27-19-1 et seq., or under the Motor Vehicle Dealer Tag Permit Law, Miss. Code Ann. Sections 27-19-301, et seq. The term “tag” includes personalized license tags. “Tag” does not include other types of license tags or plates issued by county tax collectors.

35 Miss. Admin. Code Pt. 1, R. 222 Rule 222

"Tag holder" means the person in whose name a tag is registered or the person applying for a tag.

35 Miss. Admin. Code Pt. 1, R. 223 Rule 223

"Tag penalty" means any of the penalties imposed under Miss. Code Ann. Sections 27- 19-63 and 27-51-43 for any delinquency in the payment of motor vehicle privilege tax and ad valorem tax on a motor vehicle.

35 Miss. Admin. Code Pt. 1, R. 224 Rule 224

"Tax" means any tax, fee, penalty, and/or interest that the Department is required or authorized by general law or by local and private law to administer, assess, and collect.

35 Miss. Admin. Code Pt. 1, R. 225 Rule 225

"Taxpayer" means any person or fiduciary liable for or having paid any tax to the Department.

35 Miss. Admin. Code Pt. 1, R. 226 Rule 226

“Title” means a title to a motor vehicle or manufactured housing issued by the Department under the Mississippi Motor Vehicle Title Law, Miss. Code Ann. Section 63- 21-1 et seq.

35 Miss. Admin. Code Pt. 1, R. 227 Rule 227

"Title interest holder" means the owner of or lienholder on a motor vehicle or

Page 5 of 39

manufactured home as indicated on a title issued by the Department, or as indicated on an application to the Department for the issuance of a title.

35 Miss. Admin. Code Pt. 1, R. 228 Rule 228

“Records” means, but is not limited to, written and/or computerized documentation that pertains to a person’s financial affairs in which transactions are entered and summarized, including, but not limited to, assets and liabilities, monetary transactions, contracts, or loans.

35 Miss. Admin. Code Pt. 1, R. 229 Rule 229

“Public records” means all books, records, papers, accounts, letters, maps, photographs, films, cards, tapes, recordings, or reproductions, as well as any other documentary materials, regardless of physical form or characteristics, having been used, being in use, or prepared, possessed or retained for use in the conduct, transaction or performance of any business, transaction, work, duty or function of any public body, or required to be maintained by any public body. For the purpose of this Section, the Department is a public body under Miss. Code Ann. Section 25-61-3.

35 Miss. Admin. Code Pt. 1, R. 230 Rule 230

“Source Document” means the original records containing the key details of a transaction, including its date, purpose, and amount. Source documents provide documentary evidence or proof that a transaction occurred and are critical to verify and support the information provided on a tax return. Typical source documents include, but are not limited to, wage and tax statements, sales invoices, purchase invoices, canceled checks, deposit slips, and point-of-sale records, such as cash register tapes.

35 Miss. Admin. Code Pt. 1, R. 231 (Reserved)

35 Miss. Admin. Code Pt. 1, R. 300 Obtaining Information

35 Miss. Admin. Code Pt. 1, R. 301 Rule 301

The purpose of this section is to describe how a taxpayer or an interested person may obtain available information, other than information concerning proposed rules, from the Department. Copies will be two dollars and fifty cents ($2.50) for the first page and fifty cents ($0.50) for each additional page per document. Additional research and mailing charges may apply.

35 Miss. Admin. Code Pt. 1, R. 302 Rule 302

Any person who wishes to inspect or obtain a copy of any public record in the possession of the Department must make a written request to the Legal Division of the Department. The request must describe the record sought and whether it is to be provided through personal inspection or reproduction. However, all requests for copies of returns and reports should be made to the Office that administers the tax in question.

35 Miss. Admin. Code Pt. 1, R. 303 Rule 303

Upon receipt of the request, the Department shall notify the requesting party of the cost or the time and place of access to the public record. The requesting party must then forward payment for the costs of producing the records. Every reasonable effort will be made to respond to the request within seven (7) working days from the receipt of the request if the fee to produce such records has been paid. If the Department is unable to produce a public record by the seventh (7 th ) working day from the date the request was received, the Department will contact the requesting party with an explanation of the delay and notice

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that the record will be produced within fourteen (14) working days from the receipt of the request. By mutual agreement of the parties, the records may be supplied after fourteen (14) working days. Records may not be removed from the Department for reproduction purposes.

35 Miss. Admin. Code Pt. 1, R. 304 Rule 304

If the Commissioner denies the requesting party access to any record, the requesting party will be notified in writing of the basis of the denial within seven (7) working days from the receipt of the request.

35 Miss. Admin. Code Pt. 1, R. 305 Rule 305

All tax returns, including documents supporting those returns and other tax forms required to be filed with the Department, are confidential, and specific information relating to a particular taxpayer is not public information. The Department may not release confidential information to anyone other than the taxpayer to whom that information pertains unless specifically authorized by the taxpayer, specifically authorized by statute, or directed to do so by a proper judicial order.

35 Miss. Admin. Code Pt. 1, R. 306 Rule 306

A taxpayer may request a copy of his filings by submitting a written request. The request must be signed by the taxpayer. In the case of a return of an individual, this request must be signed by that individual. In the case of an income tax return filed jointly, this request must be signed by either of the individuals who filed the return. In the case of a partnership, this request must be signed by a partner who was a member of the partnership during the period covered by the return requested. In the case of a return filed by a member-managed limited liability company, this request must be signed by a person who is a member of the limited liability company. In the case of a return filed by a manager-managed limited liability company, this request must be signed by a manager of the limited liability company. In the case of a return of a corporation, this request must be signed by a principal officer of the corporation and attested to by the corporation's secretary or another officer.

35 Miss. Admin. Code Pt. 1, R. 307 Rule 307

A taxpayer may request copies of his return or information to be released to other persons by providing the Department a signed document authorizing the release of the returns. The request for copies of returns should be submitted to the Department in writing. The written request must include the type of tax return, the tax period requested, the taxpayer’s name, and the tax account and/or taxpayer identification number. All information contained in any written request for copies of returns is submitted under penalty of perjury. A request for copies form can be found on the Department’s website under form number 70-698. 308 In order to obtain information from an individual motor vehicle record maintained by the Department, the person requesting the information must qualify under the guidelines set by federal statute. The Department has promulgated Title 35, Part VII, Subpart 1, Chapter 02 of the Mississippi Administrative Code following the Federal Driver's Privacy Protection Act, which protects certain information contained in motor vehicle records and lists permitted uses for which records may be obtained. In order to request information, the appropriate form must be completed and forwarded to the Department for processing along with the appropriate fees. The information request form and all other applicable

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information are available on the Department’s website under form number 77-600. 309 Any title and motor vehicle tag information received by the requesting party is privileged and may not be disclosed to anyone else unless that disclosure is a permitted use. Please note that using the information acquired from motor vehicle records for any use other than a permitted use may subject the offender to criminal fines and other damages. 310 Persons may receive information through instructions included with forms, notices written concerning law changes or procedural changes, booklets, and other publications of the Department. This information is provided to answer frequently asked questions but is not intended to be all-inclusive. In any situation where the information provided does not adequately address the person's particular circumstances, it is advisable to seek additional guidance. 311 Interested parties may, for a fee, order a copy of these publications by sending a request to the Communications Division within the Department. However, much of this information may be found free of charge on the Department’s website. 312 Statistical information may be obtained from the Department’s website. Many forms are available online and may be printed for use. The website also contains links to other websites, including links operated by other government agencies, tax-related organizations, and tax software providers. The Department has no control over the content included on websites other than its own. An individual may check the status of his individual income tax refund online. Persons may also check the validity of certain tax permits or licenses on the website.

35 Miss. Admin. Code Pt. 1, R. 313 (Reserved)

35 Miss. Admin. Code Pt. 1, R. 400 Adoption of Rules and Regulations

35 Miss. Admin. Code Pt. 1, R. 401 Rule 401

The Commissioner is authorized by statute to promulgate rules and regulations consistent with and complementary to the law to enforce the laws administered by the Department. A rule or regulation is a statement of general applicability that implements, interprets, or prescribes policy, or describes a procedure or practice of the Department and may include responsibilities that are not specifically required by statute or by an existing rule or regulation. Rules and regulations do not include those items excluded in Miss. Code Ann. Section 25-43-1.102(i) from the definition of a rule. The terms “rule” and “regulation” are synonymous with each other, and the Commissioner uses both terms in referring to the rules promulgated and adopted. The following discussion of the rule-making process applies not only to rules but also to regulations.

35 Miss. Admin. Code Pt. 1, R. 402 Rule 402

With the exception of emergency rules as outlined below; the adoption of a new rule or the amendment of an existing rule is a multi-step process, which includes drafting the new rule or rule amendment, preparing an economic impact statement (if necessary), filing a notice of intent to draft a rule or rule amendment, and providing an opportunity for interested parties to comment.

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35 Miss. Admin. Code Pt. 1, R. 403 Rule 403

When the need for a rule or rule amendment is determined, a proposed rule is drafted by Department personnel for review and discussion with the Commissioner.

35 Miss. Admin. Code Pt. 1, R. 404 Rule 404

When preparing an economic impact statement, an estimate of the costs and benefits of implementing and enforcing the proposed rule to the public, the Department, or any other government entity; an analysis of the effect of the new or amended rule on small businesses and on public health, safety and welfare; an estimate of the anticipated effect on state or local revenues; and a description of any alternative methods that might achieve the same purpose as the new or amended rule will be prepared by the Department when required and as provided by Miss. Code Ann. Section 25-43-3.105. A concise summary and the full text of the economic impact statement, if required, will be filed with the Secretary of State for publication along with the Commissioner's notice of intent to adopt a rule or rule amendment. Any additional information that the Department determines may be useful will be included in the statement. If the economic impact statement reflects that a proposed rule may have an economic effect on small businesses, the Department shall submit a copy of the proposed rule and economic impact statement to the Small Business Regulatory Review Committee for review and comment.

35 Miss. Admin. Code Pt. 1, R. 405 Rule 405

During the public comment period, any interested party may submit to the Department contact person identified in the notice of intent to adopt a rule, in writing, any specific concerns about the economic impact statement.

35 Miss. Admin. Code Pt. 1, R. 406 Rule 406

After the public comment period, a notice of intent to adopt a rule or rule amendment will be prepared, which will include information on how interested persons may comment on the proposal. The notice of intent to adopt a rule will include a statement of the purpose and effect of the rule, a summary of the rule, opportunities for public comment and the text of the rule. A copy of an economic impact statement, along with a concise summary of the statement, will be attached to the notice when required. The notice will be sent to the Secretary of State and to interested parties who are on the Department Rule Notification Register.

35 Miss. Admin. Code Pt. 1, R. 407 Rule 407

The notice of intent to adopt a rule or rule amendment will advise the public of its right to comment and provide information concerning how, when, and where to respond. The Department must provide no less than twenty (20) days from the date the notice of intent to adopt a rule or rule amendment, and economic impact statement are filed, during which persons may submit written comments. Interested or affected individuals or entities may comment in writing at any time during the public comment period. All written comments should be mailed or delivered to the Office of Tax Policy within the provided time period for public comment.

35 Miss. Admin. Code Pt. 1, R. 408 Rule 408

The Commissioner, at his discretion, may hold an oral proceeding prior to the final adoption of a proposed rule or amended rule. An oral proceeding may be demanded by a political subdivision, department, or ten (10) or more persons if the Commissioner does not provide a time for an oral proceeding on the proposed rule or amendment. Public comments will be accepted at the hearing as provided in this section. Written comments received or comments made at the hearing are not required to be incorporated into the

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final rule but will be considered by the Commissioner in drafting the final rule or rule amendment. The Commissioner may designate an officer to preside over the hearing on the proposed new or amended rule and to document attendance and comments made. The presiding officer will be an employee of the Department.

35 Miss. Admin. Code Pt. 1, R. 409 Rule 409

The hearing date will be scheduled for a date that is at the minimum twenty (20) days after the notice of the proposed rule is filed with the Secretary of State. The hearing will be open to the public. Anyone wishing to make a presentation at the hearing should notify, in writing, the Office of Tax Policy no less than seventy-two (72) hours prior to the scheduled hearing time.The written request to speak must include a brief description of what the speaker plans to present at the hearing and the position the speaker plans to take on the proposed rule.

35 Miss. Admin. Code Pt. 1, R. 410 Rule 410

The presiding officer may limit the time allotted to each speaker. The number of speakers addressing a specific position on an issue may be limited by the presiding officer to prevent undue repetition at the hearing. In the event the number of speakers representing a specific position is limited, the speakers selected to speak to their position will be determined based upon the order in which their requests were received. The speaker will be notified of the time he is allotted to speak or will be notified that he has been denied the opportunity to speak to prevent undue repetition or for failure to timely request the opportunity to speak at the hearing.

35 Miss. Admin. Code Pt. 1, R. 411 Rule 411

A record of all persons requesting the opportunity to speak will be maintained. This record will include the written requests to speak at the public hearing and any denials for untimely filing of a request to participate in the public hearing or to prevent repetition. All persons participating or unable to participate in the hearing may submit written comments at any time during the public comment period. All persons in attendance will be requested to sign a register to document their presence at the hearing. A printed agenda including the names of all speakers and their positions on issues concerning the proposed rule may be provided to those in attendance.

35 Miss. Admin. Code Pt. 1, R. 412 Rule 412

The Commissioner may change, alter or delete any provisions of the proposed rule after the public comment period unless such change, alteration, or deletion would prevent the rule from being finally adopted per Miss. Code Ann. Section 25-43-3.107. The Commissioner will file the final form of the rule or rule amendment with the Secretary of State. The effective date is thirty (30) days after filing with the Secretary of State unless another later date is specified in the law or rule.

35 Miss. Admin. Code Pt. 1, R. 413 Rule 413

The Department will maintain the Department Rule Notification Register listing the persons who have requested notice of all proposed rule changes. The Department will send notice of all proposed rules or rule amendments to these persons by mail. A minimum fee of twenty-five dollars ($25) will be charged for each notice that is mailed, and a bill for the fee will accompany all notices. Failure to remit the fee as billed will result in the forfeiture of any future mailings until the fee has been paid. Any interested person may be included on the mailing register for all proposed notices under a written request to the Office of Tax Policy. It is the requestor's responsibility to provide and keep a correct address on file with the Department.

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35 Miss. Admin. Code Pt. 1, R. 414 Rule 414

If a person desires notice of all proposed rules and agrees to receive the notices by e- mail, there will be no charge for this service. Any interested person may be included in the register of persons to be notified by e-mail by written request to the Office of Tax Policy. If email preference is not specified, notice will be sent by mail, which will include the fee. A person may also request a copy of a proposed rule or rule amendment on a one-time basis by contacting the Office of Tax Policy. For any mailed document, the minimum fee is still applicable. Additional information regarding the adoption of rules and regulations may be obtained on the Department’s website.

35 Miss. Admin. Code Pt. 1, R. 415 Rule 415

The Department will maintain a current rulemaking docket that contains the subject matter of rules under active consideration within the Department. The rulemaking docket shall include all information related to the rule in progress, including the subject matter of the proposed rule, reference to all published notices relating to the proceeding, where a written submission or a written request for an opportunity to make an oral presentation on the proposed rule may be inspected, the time during which written submissions may be made, where and when oral presentations may be made, where any economic impact statement and written requests for the issuance of other information concerning an economic impact statement may be personally inspected, the current status of the proposed rule, and the date of each rule’s adoption and when the rule becomes effective. All materials, submissions, reports, and other information relating to each rule adoption process and procedure will be maintained at the main office of the Department and will be available for public inspection by contacting the Office of Tax Policy.

35 Miss. Admin. Code Pt. 1, R. 416 Rule 416

If the Commissioner determines that an existing rule should be repealed, the process followed will be the same as for the adoption of a new rule or an amendment to a rule.

35 Miss. Admin. Code Pt. 1, R. 417 Rule 417

The Commissioner may determine that the rule or rule amendment should not be adopted after the notice of t h e proposed rule but before t h e adoption of the rule. In such event, a notice of termination will be filed with the Secretary of State and notice will be provided to those persons listed on the Department Rule Notification Register.

35 Miss. Admin. Code Pt. 1, R. 418 Rule 418

The Commissioner may determine that an imminent peril to the public health, safety or welfare requires the adoption of a rule with less than twenty-five (25) days' notice as normally provided. In such event, the Commissioner will notify the Secretary of State of the need for an emergency rule, the form of the rule, and the effective dates of the rule. There will be no public hearing or public comment period provided. The Commissioner will determine if the need for the emergency rule continues, and if so, will begin the process of adopting the rule permanently as provided in this section.

35 Miss. Admin. Code Pt. 1, R. 419 (Reserved)

35 Miss. Admin. Code Pt. 1, R. 500 Appeals and Review Process

35 Miss. Admin. Code Pt. 1, R. 501 Rule 501

This section describes the administrative appeal process to be followed when a person is

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aggrieved by certain actions of the Department and includes a description of the types of actions that may be appealed, how to file appeals, the scheduling and conduct of administrative hearings, time limits for filing appeals and withdrawals of appeals. The administrative appeal process intends to secure a just resolution or decision.

35 Miss. Admin. Code Pt. 1, R. 502 Rule 502

With the exception of an appeal of a tag penalty, this section does not describe the administrative appeal process relating to actions of the Department regarding ad valorem taxes and homestead exemptions. An administrative appeal from these actions shall be as prescribed by statute. This section also does not describe the administrative appeal process for actions taken by the Department under the Local Option Alcoholic Beverage Control Law, the Mississippi Native Wine Act of 1976, The Mississippi Native Spirit Law, or the Mississippi Medical Cannabis Act. The administrative appeal process for such actions is described in the ABC and Medical Cannabis Dispensary Regulations of the Department.

35 Miss. Admin. Code Pt. 1, R. 503 Rule 503

A person may represent himself or may choose to have a representative at any point throughout the appeal process. Hearings before the Review Board or a hearing officer are considered confidential and are not open to the public; however, the appellant may permit another person or persons to attend the hearing and to participate as deemed appropriate or necessary.

35 Miss. Admin. Code Pt. 1, R. 504 Rule 504

Filing an appeal does not stop interest charges from accruing on any unpaid tax liability. In some situations, penalties may also continue to accrue.

35 Miss. Admin. Code Pt. 1, R. 505 Rule 505

The taxpayer or person appealing must request a hearing in writing. A Review Board Appeal Petition form, which can be found on the Department’s website or on the Taxpayer Access Point (TAP), may be used to make the hearing request. The written request must include the following information: 1. All requested information about the taxpayer or person appealing including name, address, contact phone number, amount of assessment, period, and account number. 2. The issue being appealed. 3. An explanation of the reason for the appeal. 4. The amount of tax, fees, interest, and/or penalty being contested, if any. 5. The decision that the person appealing would like the Review Board to make. 6. All requested information about the person’s representative, if applicable, including the representative’s name, address, contact phone number, and relationship to the taxpayer, accompanied by a Power of Attorney authorizing the representative to act on the person’s behalf. 7. The mailing address at which the person appealing wishes to receive correspondence from the Review Board. 8. A copy of what is being appealed. 9. All necessary supporting documentation for the taxpayer’s claims.

35 Miss. Admin. Code Pt. 1, R. 506 Rule 506

The Petition must be signed and dated by the taxpayer or person appealing. The appeal must be postmarked within the period prescribed for the appeal. If the appeal is not

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postmarked by the deadline for the appeal, it cannot be considered due to untimeliness.

35 Miss. Admin. Code Pt. 1, R. 507 Rule 507

It is the responsibility of the person appealing to provide and maintain an official mailing address on file with the Review Board. Any change of address during the appeal process must be made known in writing and addressed to the Review Board. This notice of address change is for the appeal process only and does not make any address change to the tax account information maintained by the Department.

35 Miss. Admin. Code Pt. 1, R. 508 (Reserved)

35 Miss. Admin. Code Pt. 1, R. 600 Informal Review

35 Miss. Admin. Code Pt. 1, R. 601 Rule 601

A person may seek an informal review of any assessment or other action believed to be incorrectly issued or any refund believed to be improperly denied.

35 Miss. Admin. Code Pt. 1, R. 602 Rule 602

When an auditor or examiner determines additional tax is due, the person assessed with the tax should first attempt to resolve any questions with the auditor or examiner. If unable to reach an agreement with the auditor regarding the audit results, a conference with the auditor’s supervisor or the supervisor's designee may be arranged. This conference should provide an opportunity for both parties to gain a thorough understanding of the basis of the assessment and to make sure that the underlying facts are correct and complete.

35 Miss. Admin. Code Pt. 1, R. 603 Rule 603

An informal review may be granted for any situation but is not required before seeking an administrative appeal. The person may continue to attempt to resolve an issue informally with Department staff once the formal appeal process has begun but the informal review does not toll the time limit to appeal to the Review Board.

35 Miss. Admin. Code Pt. 1, R. 604 (Reserved)

35 Miss. Admin. Code Pt. 1, R. 700 Notice, Continuance, and Confidentiality of Hearings

35 Miss. Admin. Code Pt. 1, R. 701 Rule 701

A person or his authorized representative will be notified of the hearing by mail at his last known address. The last known address will be the mailing address provided in the written request for appeal or any subsequent address change notification to the Review Board.

35 Miss. Admin. Code Pt. 1, R. 702 Rule 702

The hearing notice will contain the time, place, and date of the hearing. Notice to the person's or taxpayer's authorized representative constitutes notice to the person or taxpayer.

35 Miss. Admin. Code Pt. 1, R. 703 Rule 703

A request for a continuance of the hearing will be routinely granted if the request is received within ten (10) business days after the notice of the hearing is mailed. If the request for continuance is received beyond ten (10) business days from the date the notice of hearing is mailed, then the determination of whether to continue the hearing will be made by the Chairman of the Review Board. The Department will not be

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responsible for delays in the delivery of mail.

35 Miss. Admin. Code Pt. 1, R. 704 Rule 704

All hearings are closed to the public due to the confidential nature of the subject matter. However, through written authorization, the person appealing may waive the right to a closed hearing.

35 Miss. Admin. Code Pt. 1, R. 705 Rule 705

Items subject to administrative appeal are: 1. Assessment of tax. 2. Denial of refund claim. 3. Denial of waiver of tag penalty. 4. Denial of a claim to tax credits or incentives. 5. Suspension, surrender, seizure, or revocation of permit, tag, or title. 6. Denial of an application for a permit, IFTA license, IRP registration, tag or title. 7. Suspension or revocation of IFTA license or IRP registration.

35 Miss. Admin. Code Pt. 1, R. 706 Rule 706

Items not subject to administrative appeal include but are not limited to: 1. Bond amounts. 2. Declaratory Opinions. 3. Letter rulings. 4. Oral or written advice. 5. Collection actions including but not limited to, liens and garnishments. 6. Diversions or distributions of tax revenue. 7. Refund offsets used to pay debts owed to other government agencies.

35 Miss. Admin. Code Pt. 1, R. 707 Rule 707

A taxpayer aggrieved by an assessment of tax, penalty, or interest; a denial of a refund; a denial of a claim to tax credits or incentives; or a denial of a waiver of tag penalty; may apply for a hearing before the Review Board. The taxpayer must submit a request in writing to the Chairman of the Review Board within sixty (60) days from the date of mailing. The matter will become final after these sixty (60) days if it is not appealed.

35 Miss. Admin. Code Pt. 1, R. 708 Rule 708

If the Review Board determines that the assessed tax, penalty, or interest is due, the taxpayer must pay the assessment or appeal to the Board of Tax Appeals within sixty (60) days from the mailing date of the order of the Review Board. A taxpayer wishing to appeal an order of the Review Board must submit the request for appeal in writing to the Executive Director of the Board of Tax Appeals. At the time of filing his appeal with the Executive Director, the taxpayer shall also file a copy of his written appeal with the Review Board. The matter will become final after these sixty (60) days if it is not appealed.

35 Miss. Admin. Code Pt. 1, R. 709 Rule 709

The Department may determine that action against a permit, IFTA license, IRP registration, tag, or title is necessary. In that case, the document holder or the applicant requesting the issuance of such will be notified by mail of the Department’s intention to revoke, suspend, or order the surrender or seizure of the permit, tag, or title. If an initial application for any of the above-referenced items is to be denied the applicant requesting the issuance of such will be notified likewise by mail. If a denial involves an application for a title, the notice will also be mailed to the designated agent who submitted the title

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application and any other alleged title interest holders shown on the application. If an applicant, title interest holder, permittee, licensee, registrant, or tag holder is aggrieved by the denial of the application; revocation of a permit, license, or registration; suspension of a permit, license, or registration; or order to surrender or seize a permit, tag or title; the aggrieved party shall file a written appeal with the Review Board within thirty (30) days of the mailing date of the notice. The matter will become final after these thirty (30) days if it is not appealed.

35 Miss. Admin. Code Pt. 1, R. 710 Rule 710

If the permittee, IFTA licensee, IRP registrant, tag holder, or title interest holder is aggrieved by the determination of the Review Board or hearing officer, the aggrieved party may appeal in writing to the Executive Director of the Board of Tax Appeals within thirty (30) days of the mailing date of the order. At the time of filing his appeal with the Executive Director, the permittee, IFTA licensee, IRP registrant, tag holder or title interest holder shall also file a copy of his written appeal with the Review Board. The matter will become final after these thirty (30) days if it is not appealed.

35 Miss. Admin. Code Pt. 1, R. 711 Rule 711

When an appeal, objection, or other document is required by statute, regulation or the Department to be filed with the Review Board within any number of days; the day of the act, event, or default from which the designated period begins to run shall not be included. The last day of the period so computed shall be included unless it is a Saturday, a Sunday, a legal holiday, or any other day when the offices of the Department are closed, with or without legal authority, in which event the period runs until the end of the next day which is not a Saturday, a Sunday, a legal holiday or any other day when the office of the Department is closed. Legal holidays for the Department are found at Miss. Code Ann. Section 3-3-7(1). When the period prescribed or allowed is less than seven days, intermediate Saturdays, Sundays, and legal holidays shall be excluded from the computation.

35 Miss. Admin. Code Pt. 1, R. 712 (Reserved)

35 Miss. Admin. Code Pt. 1, R. 800 Review Board Hearings

35 Miss. Admin. Code Pt. 1, R. 801 Rule 801

With the exception of matters regarding Alcoholic Beverage Control, medical cannabis dispensaries, native wine and spirits, and Department actions related to Ad Valorem Tax; a taxpayer or person in disagreement with an assessment, refund, or other appealable action of the Department may request a hearing before the Review Board. Three members of the Review Board shall constitute a quorum and may hear any matter before the Review Board; however, an appeal of the intent to revoke, suspend, or order for seizure or surrender of a permit, tag, or title may be heard by a panel of the Review Board or by a hearing officer.

35 Miss. Admin. Code Pt. 1, R. 802 Rule 802

Upon timely receipt of a written request from the person appealing or his authorized representative, the Review Board shall promptly schedule a hearing for consideration of the appeal. At the hearing, the Review Board shall decide the issues presented according to the applicable law and the facts.

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35 Miss. Admin. Code Pt. 1, R. 803 Rule 803

A decision in favor of the person appealing may be made without a hearing when the facts are not in dispute, the issues are clearly identified, or the law has been applied in the same manner in similar situations in previous decisions.

35 Miss. Admin. Code Pt. 1, R. 804 Rule 804

There will be no official transcript or recording made of a Review Board hearing. The official record of the hearing will be the minutes and orders of the Review Board, which are confidential for all tax matters. Review Board hearings shall be informal, and the rules of evidence shall be relaxed. This paragraph is not applicable to medical cannabis appeals.

35 Miss. Admin. Code Pt. 1, R. 805 Rule 805

In any appeal covered by this Chapter, the burden of proof shall be on the appellant to prove that the action of the Department is incorrect. The person requesting the hearing or the person's authorized representative will be asked to discuss the facts supporting the person’s claim and to provide an explanation of how the law supports that claim. Representatives of the Department may also be asked to discuss the facts in support of the Department’s action or cause.

35 Miss. Admin. Code Pt. 1, R. 806 Rule 806

The Review Board may request the person appealing the matter or Department staff to provide additional information and/or documents during its review. Time limits for submission of the additional information or documents will be established by the Chairman of the Review Board. If the person from whom information or documents are requested fails to respond to the request in the time provided, the Review Board may decide the appeal without the supplemental documents or information.

35 Miss. Admin. Code Pt. 1, R. 807 Rule 807

An order will be issued after the Review Board has fully considered the information provided at the hearing, any post-hearing information submitted to the Review Board, and the laws specific to the case. The Chairman of the Review Board will prepare the order and mail it to the person or authorized representative. Notice to the authorized representative constitutes notice to the person appealing.

35 Miss. Admin. Code Pt. 1, R. 808 Rule 808

The Review Board may elect to uphold the assessment, amend the assessment, issue a revised assessment, issue a refund or credit, remand the issue to the originating division for further review, or to take any other action it deems appropriate. If the person remains aggrieved by the decision of the Review Board, the action may be appealed to the Board of Tax Appeals within the time limits set forth above.

35 Miss. Admin. Code Pt. 1, R. 809 Rule 809

Any person may request that a member of the voting panel of the Review Board be replaced or that a member not participate in a hearing if it appears that member's impartiality might be questioned by a reasonable person knowing all the circumstances, or for other reasonable grounds. A written or verbal request for removal of a voting member from the decision-making process stating the reason the member’s impartiality is questioned must be made by the taxpayer or person appealing before the commencement of a Review Board hearing. Such request should be made to the Chairman or the presiding member of the Review Board. Any denial of the request is not subject to appeal.

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35 Miss. Admin. Code Pt. 1, R. 810 Rule 810

Any person aggrieved by a final order of the Review Board may seek an administrative review of that decision by the Board of Tax Appeals by filing a written appeal with the Executive Director of the Board of Tax Appeals as provided by law. The person filing the appeal with the executive director shall also file a copy of his written appeal with the Review Board.

35 Miss. Admin. Code Pt. 1, R. 811 (Reserved)

35 Miss. Admin. Code Pt. 1, R. 900 Withdrawal of an Appeal

35 Miss. Admin. Code Pt. 1, R. 901 Rule 901

An appeal before a hearing officer or the Review Board may be withdrawn at any time by the taxpayer or person filing the appeal. The withdrawal may be made voluntarily by the person or may occur involuntarily under the conditions listed below.

35 Miss. Admin. Code Pt. 1, R. 902 Rule 902

An involuntary withdrawal of an appeal may occur as a result of the person’s failure to appear at a scheduled hearing, failure to timely provide a written appeal instead of attendance at a hearing, or by any other act or failure that the body hearing the appeal determines is a failure on the part of the person to prosecute his appeal. An involuntary withdrawal will be documented in the minutes providing the basis of the withdrawal.

35 Miss. Admin. Code Pt. 1, R. 903 Rule 903

A voluntary withdrawal of an appeal must be delivered in writing by the person or authorized representative to the Chairman of the Review Board prior to the scheduled time of the hearing on the appeal. Following the withdrawal of an appeal, the action shall become final and not subject to further review by the Review Board, Board of Tax Appeals, or a court. The Department shall then proceed with any action in accordance with the law.

35 Miss. Admin. Code Pt. 1, R. 904 (Reserved)

35 Miss. Admin. Code Pt. 1, R. 1000 Letter Rulings and Informal Guidance

35 Miss. Admin. Code Pt. 1, R. 1001 Rule 1001

Any taxpayer or person seeking information concerning their responsibilities and requirements under the laws administered by the Department may request advice and guidance concerning those obligations. The requests may be through an informal means, such as oral advice or letter rulings, or formally through a declaratory opinion.

35 Miss. Admin. Code Pt. 1, R. 1002 Rule 1002

Taxpayers or other persons may also obtain publications from the Department that provide information useful in complying with the laws administered by the Department. Most printed publications of the Department may also be found on the Department’s website.

35 Miss. Admin. Code Pt. 1, R. 1003 Rule 1003

Many questions may be answered easily over the telephone or in person by an agent of the Commissioner. Oral advice is considered advisory only and is non-binding. Taxpayers or persons who have complicated questions or issues centered on their own particular facts and circumstances should seek a letter ruling on the matter or request further advice from the Department as provided in this Chapter.

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35 Miss. Admin. Code Pt. 1, R. 1004 Rule 1004

Taxpayers or other persons may seek guidance by submitting a written request for a letter ruling to the Office of Tax Policy. When asking for instruction on a specific issue, it is necessary to provide adequate information in order to accurately answer the question. Because a request is based on one person's specific facts and circumstances, the response is restricted to the taxpayer or person making the request for information and the specific facts involved.

35 Miss. Admin. Code Pt. 1, R. 1005 Rule 1005

Letter rulings are considered informal guidance; however, the taxpayer or person requesting the letter ruling may rely on the response absent a subsequent law or regulation change or written retraction, provided that the information presented is factual and complete with no material omissions and that no changes have been made with regard to the information provided.

35 Miss. Admin. Code Pt. 1, R. 1006 Rule 1006

The Department will refuse to issue a letter ruling under the following circumstances: 1. The matter is outside the primary jurisdiction of the Department. 2. The question presented lacks clarity, has insufficient facts to provide a conclusive determination, or is too vague or too broad to be answered. 3. There is a pending or active audit, criminal tax investigation, anticipated litigation, administrative action, or other determination before the Department, Board of Tax Appeals, or a court of law that may either answer the question presented or otherwise make an answer unnecessary. 4. The question presented in the request concerns the legal validity of a statute or rule. 5. No clear answer is determinable. 6. The question presented involves the application of a criminal statute or facts that may constitute a crime. 7. The answer to the question presented would require the disclosure of information that is privileged or otherwise protected by law from disclosure. 8. The request involves an issue that may adversely affect the interests of the State, the Department, or any of the Department’s officers or employees in any litigation that is pending or may reasonably be expected to arise.

35 Miss. Admin. Code Pt. 1, R. 1007 Rule 1007

If the Department should at a later date determine that its response regarding a letter ruling was incorrect, the letter ruling will be retracted in writing and the effect of the retraction will be prospective from the date of the retraction letter.

35 Miss. Admin. Code Pt. 1, R. 1008 Rule 1008

Absent a written retraction of the letter ruling, a law or rule change, or a change in the person's particular circumstances that affects the issue being addressed, a letter ruling will be valid for seven years from the date of its issuance. At the end of the 7-year period, the person should review and update the information in his original request for information and re-submit the question to the Department.

35 Miss. Admin. Code Pt. 1, R. 1009 Rule 1009

Any letter rulings written by the Department before June 30, 2005, are no longer valid. A recipient of a ruling issued prior to that date should review their letter ruling to determine if an update is necessary.

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35 Miss. Admin. Code Pt. 1, R. 1010 Rule 1010

The Department will accept an anonymous request for a letter ruling, but the response will not be binding until the identity of the person to whom the request pertains has been disclosed to the Department. The name and other identifying information of the anonymous person should be provided within ninety (90) days of the date of the letter ruling. The letter ruling will be considered non-binding if the identity of the person is not provided within the period specified.

35 Miss. Admin. Code Pt. 1, R. 1011 Rule 1011

A response to a person's authorized representative constitutes notice to that person. It is the person's continuing obligation to inform the Department of the identity and address of its representative.

35 Miss. Admin. Code Pt. 1, R. 1012 (Reserved)

35 Miss. Admin. Code Pt. 1, R. 1100 Declaratory Opinions

35 Miss. Admin. Code Pt. 1, R. 1101 Rule 1101

These sections set forth the Department's rules governing the form and content of requests for declaratory opinions and the Department's procedures regarding the requests under Miss. Code Ann. Section 25-43-2.103.

35 Miss. Admin. Code Pt. 1, R. 1102 Rule 1102

Any person with a substantial interest in the subject matter on which he is requesting information may submit a written request to the Department for a declaratory opinion by following the procedures specified below. Substantial interest in the subject matter means that the interest must be direct, immediate, not remote in consequence, and must surpass the common interest of all citizens.

35 Miss. Admin. Code Pt. 1, R. 1103 Rule 1103

The Department will issue declaratory opinions regarding subject matters that are within the primary administrative responsibilities of the Department. Subject matters within the oversight of the Department include the applicability of specified facts to a statute administered or enforced by the Department, or to a rule promulgated by the Commissioner. The Department will not issue a declaratory opinion regarding a statute or rule beyond the administrative responsibility of the Department.

35 Miss. Admin. Code Pt. 1, R. 1104 Rule 1104

The Department may, for good cause, refuse to issue a declaratory opinion. The circumstances in which declaratory opinions will not be issued include, but are not necessarily limited to: 1. The matter is outside the primary jurisdiction of the Department. 2. The question presented lacks clarity, the facts provided are insufficient to provide a conclusive determination, or the information is too vague or too broad to provide an answer. 3. There is a pending or active audit, criminal tax investigation, anticipated litigation, administrative action, or other determination before the Department, Board of Tax Appeals, or a court of law, which may either answer the question presented or otherwise make an answer unnecessary. 4. The statute, rule, or order on which a declaratory opinion is sought is clear and does not require interpretation in order to answer the question presented.

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The confidentiality waiver on the Declaratory Opinion Transmittal Form is not signed and provided to the Department with the request for a declaratory opinion. 6. The request fails to contain the information required by these rules, or the requestor fails to follow the procedure outlined in these rules. 7. The request seeks to resolve issues that have become moot, are abstract, or involve multiple hypotheticals such that the requestor is not substantially affected by the rule or statute on which a declaratory opinion is sought. 8. The request pertains to a hypothetical situation, the underlying facts of which do not, and are not anticipated to, affect or pertain to the requesting party. 9. The question presented concerns the legal validity of a statute or rule. 10. The requesting party is not directly affected by the application of the statute, rule, or regulation. 11. No clear answer is determinable. 12. The question presented involves the application of a criminal statute or facts that may constitute a crime. 13. The answer to the question presented would require the disclosure of information that is privileged or otherwise protected by law from disclosure. 14. The request involves an issue that may adversely affect the interests of the State, the Department, or any of the Department's officers or employees in any litigation that is pending or may reasonably be expected to arise. 15 No controversy exists or is certain to arise, raising a question concerning the application of the statute, rule, or order. 16 The request is not based upon facts calculated to aid in planning future conduct, but is, instead, based on past conduct to establish the effect of that conduct. 17 A similar request is pending before this Department, or any other Department, or a proceeding is pending on the same subject matter before any Department, administrative or judicial tribunal, or where such an opinion would constitute the unauthorized practice of law.

35 Miss. Admin. Code Pt. 1, R. 1105 Rule 1105

A written request for a Declaratory Opinion is required. Each request must be printed, typewritten, or in legible handwriting. Each request must be submitted on standard business letter-size paper. Requests may be in the form of a letter addressed to the Office of Tax Policy or in the form of a pleading as might be addressed to a court.

35 Miss. Admin. Code Pt. 1, R. 1106 Rule 1106

All requests must be mailed or delivered to the Office of Tax Policy. The request and the envelope in which it is delivered shall clearly state that it is a request for a declaratory opinion. Oral and telephonic, requests are not acceptable. The request must include a completed transmittal form as prescribed by the Commissioner and an executed confidentiality waiver signed by the taxpayer or person requesting the declaratory opinion.

35 Miss. Admin. Code Pt. 1, R. 1107 Rule 1107

Each request must include the full name, telephone number, and mailing address of the requestor. Each request shall be signed by the person filing the request or a duly authorized representative. The signing party shall attest that the request complies with the requirements set forth in these rules. A declaratory opinion will have no effect if it is

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later determined the request did not comply with the requirements of this rule.

35 Miss. Admin. Code Pt. 1, R. 1108 Rule 1108

A request must be limited to a single set of facts and each request must contain the following: 1. Clear identification of the statute, rule, or order at issue. 2. A concise statement of the issue or question presented for the declaratory opinion. 3. A complete and accurate statement of all facts relevant to a resolution of the question presented. 4. The identity of all known persons involved in or impacted by the factual situation described in the request, including their relationship to the facts, their names, their mailing addresses, and their telephone numbers. 5. A statement sufficient to show that the person making the request is substantially affected by the statute, rule, or regulation.

35 Miss. Admin. Code Pt. 1, R. 1109 Rule 1109

A request may contain relevant information to support a position or proposed opinion suggested by the requestor. The argument may be submitted in the form of a brief containing a full discussion of the basis for the request, including any legal authorities in support of the position of the requestor. The Department may request that additional information be submitted by any interested party.

35 Miss. Admin. Code Pt. 1, R. 1110 Rule 1110

Within forty-five (45) days after the receipt of a request for a declaratory opinion that complies with the requirements of these rules, the Department will respond in writing by one of the following methods: 1. Issue an opinion declaring the applicability of the specified statute, rule, or order to the specified circumstances. 2. Decline to issue a declaratory opinion, stating the reasons for its action. 3. Agree to issue a declaratory opinion or a written decision by a specified time later than forty-five (45) days but no later than ninety (90) days after receipt of the written request.

35 Miss. Admin. Code Pt. 1, R. 1111 Rule 1111

The forty-five (45)day period will begin on the first business day after the request is received by the Department. The response may be sent to the authorized representative instead of the requesting party or the person signing the request.

35 Miss. Admin. Code Pt. 1, R. 1112 Rule 1112

Declaratory opinions and requests for declaratory opinions are available for public inspection. The taxpayer must sign a confidentiality waiver to authorize the Department to disclose the contents of a declaratory opinion.

35 Miss. Admin. Code Pt. 1, R. 1113 (Reserved)

35.I.01 revised effective December 21, 2024

Chapter 02 Taxpayer Records and Document Retention

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35 Miss. Admin. Code Pt. 1, R. 100 Definitions

35 Miss. Admin. Code Pt. 1, R. 101 Rule 101

“Commissioner” means the Commissioner of the Mississippi Department of Revenue.

35 Miss. Admin. Code Pt. 1, R. 102 “Department” means the Mississippi Department of Revenue

35 Miss. Admin. Code Pt. 1, R. 103 Rule 103

“Designated representative” means an individual, business, private service provider or employee who represents a taxpayer in the preparation and/or maintenance of records as provided in the regulation.

35 Miss. Admin. Code Pt. 1, R. 104 Rule 104

“Person” means a natural person, partnership, limited partnership, corporation, limited liability company, estate, trust, association, joint venture, other legal entity or other group or combination acting as a unit, and includes the plural as well as the singular in number.

35 Miss. Admin. Code Pt. 1, R. 105 Rule 105

“Records” means written and/or computerized documentation that pertains to a person’s financial affairs in which transactions are entered and summarized, including but not limited to, assets and liabilities, monetary transactions, contracts, or loans.

35 Miss. Admin. Code Pt. 1, R. 106 Rule 106

35 Miss. Admin. Code Pt. 1, R. 200 General

35 Miss. Admin. Code Pt. 1, R. 201 Rule 201

The purpose of this regulation is to outline the general requirements imposed on every taxpayer to prepare and retain all records necessary to determine the correct tax liability with respect to taxes administered by the Department of Revenue. These requirements are imposed on all taxpayers without regard to whether they use paper, computer, or electronic processes, systems, or technology.

35 Miss. Admin. Code Pt. 1, R. 202 Rule 202

Every taxpayer and every designated representative, if applicable, is required to keep accurate, complete, and legible records. Records should be adequate to provide reasonable assurance that all taxable transactions and income are properly identified and recorded. Records must be supported by source documents. In addition: 1. Records must be kept in good order and condition. Each source document should have a unique identifier, usually a number or alphanumeric code. Pre- numbering of commonly used forms, such as sales invoices, helps to classify transactions and to identify and locate missing source documents. 2. Records including financial statements, reports, and any information used to prepare a tax return must be supported by source documents that verify and confirm the income, expenses, and credits reported on tax returns and financial statements. 3. Records must be written in English.

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Source documents such as bills, receipts, checks, invoices, and cash register tapes must include the transaction date whether printed on paper or created and maintained in an electronic format. 5. Records and source documents must be available for review by the Department upon request. 6. For business taxpayers, the records must be kept at the place of business. If the principal place of business is outside Mississippi, the records of the taxpayer may be kept at their principal place of business. 203 A taxpayer or his designated representative, if applicable, should keep separate business and personal records with transactions clearly identified as business or personal. If a taxpayer owns multiple businesses, the records for each business must be kept separate. 204 If a taxpayer makes deposits or transfers of non-business income or money into a business account, sufficient documentation must be maintained to support the source of those funds. If the non-business funds were a loan, maintain a copy of the signed loan instrument that shows the lender's name, date, and amount of the loan. If the non- business funds were a transfer from a personal account or another business account, or if the funds were a refund, rebate, or similar, maintain documentation to support the source of that money, including but not limited to canceled checks and deposit slips. 205 Records may be considered inadequate if: 1. There are missing, lost, or incomplete documents or records, and/or the records are not in a form that the Department can audit. 2. The taxpayer or his designated agent, if applicable, failed or refused to provide records to the Department. 3. The records do not clearly demonstrate receipts or transactions to a degree necessary to determine the amount of tax which the taxpayer is liable for. 4. The records do not substantiate the taxable status of purchases and/or show that a business’s purchases correlate to business activity.

35 Miss. Admin. Code Pt. 1, R. 206 Rule 206

If adequate records necessary to determine the tax due are not kept, or if an audit of the records of a taxpayer, or any return filed by him, or any other information discloses that taxes are due and unpaid, the Commissioner may take actions that include, but are not limited to: 1. Disallowing exemptions, credits, or reduced rates of tax. 2. Making assessments of due and unpaid taxes. 3. Suspending or revoking permits.

35 Miss. Admin. Code Pt. 1, R. 207 Rule 207

In most cases, records are to be maintained no less than three (3) years from the date the return was filed. There are instances when records should be kept for longer periods, such as: 1. If a notice of assessment or denial of refund has been issued to the taxpayer by the Department and the taxpayer files an appeal, the records for the periods covered by the notice of the assessment or denial of refund must be preserved and retained until the issue has been resolved.

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Maintaining records that will be needed to complete a future return, such as when the records have information related to a net operating loss or net casualty loss. 3. A return has been subject to a federal audit. 208 Examples of records to maintain include, but are not limited to, the following: 1. General ledgers, sales journals, purchase order books, cash receipts books, and cash disbursement books. 2. Canceled checks, bank statements, sales contracts, and purchase invoices. 3. Profit and loss statements and balance sheets. 4. State tax returns and reports, including all schedules or work papers used in the preparation of tax reports or returns. 5. Copies of federal income tax returns filed with the Internal Revenue Service including all work papers, schedules, and similar records. 6. Tax filings with other states including all work papers, schedules, and similar records. 7. Records of loans, services, other non-sales transactions, and any non-business income. 8. Any other records necessary to establish income, deductions, credits, expenses, accounting methods, or other information utilized in determining the Mississippi tax liability. 9. Digital payment records, e.g., Cash App, PayPal, and Venmo. 209 The requirements contained in this regulation are not to be construed as an exclusive list for each person. Record keeping and retention requirements will vary by tax type, business type, and on an individual basis.

35 Miss. Admin. Code Pt. 1, R. 210 (Reserved)

35.I.02 revised effective December 21, 2024

Chapter 03 Substitute and Reproduced Tax Forms

35 Miss. Admin. Code Pt. 1, R. 100 General

35 Miss. Admin. Code Pt. 1, R. 101 Rule 101

The Department of Revenue has established guidelines for software developers and any individual or business that plans to market, distribute, or file substitute or reproduced tax forms.

35 Miss. Admin. Code Pt. 1, R. 102 Rule 102

Any form, other than an official Department form, that is printed, or computer produced/programmed is a substitute form. All substitute forms produced by software providers must be submitted to the Department for approval prior to being included in a software package for use by the general public. Substitute forms must be approved annually. The Department will make available to providers a template and a key to use in creating their versions of Department forms. Copies of the Mississippi Guidelines for

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Providers of Substitute Forms are available on request. 103 Provider's responsibilities are: 1. To comply with the Substitute Forms Guidelines; 2. To obtain written approval from the Department for all forms printed and/or distributed, as well as forms that will be generated by tax preparation software; and 3. To ensure that all forms actually generated by the software match the form designed by the Department.

35 Miss. Admin. Code Pt. 1, R. 104 Rule 104

A taxpayer may file returns printed from a provider’s tax preparation software package if the forms printed from the packager have been approved by the Department. If the forms printed from the package have been approved, then the provider should have an email from the Department approving these forms. These forms should be printed by a laser printer or laser-quality printer. 105 Taxpayer’s and Tax Preparer’s responsibilities are: 1. To file their return using an original Department form; 2. To file their return on an approved provider form; or 3. To file their return using a tax preparation software package that generates the form approved by the Department.

35 Miss. Admin. Code Pt. 1, R. 106 Rule 106

It is the responsibility of both Taxpayers and Tax Preparers to file the original return with an original signature. Photocopies are not acceptable.

35 Miss. Admin. Code Pt. 1, R. 107 Rule 107

A penalty of twenty-five dollars ($25.00) may be imposed for each form in each return not in compliance with this rule whether said form is a photocopy or an unapproved form. This penalty may be imposed on the taxpayer, tax preparer, and/or provider.

35 Miss. Admin. Code Pt. 1, R. 108 Rule 108

Photocopies will only be accepted in limited circumstances as follows: 1. If a taxpayer must file a duplicate of their return after the original filing, a photocopy is acceptable. A letter clearly stating that it is a duplicate and the reason the original is not available must be attached. 2. Photocopies including photocopies of federal forms may be used as attachments only if specifically allowed in the instructions that accompany each form. For example, the Department will accept a photocopy of the individual income Federal Schedule A of Itemized Deductions or the Federal Balance Sheet attached to the corporate return.

35 Miss. Admin. Code Pt. 1, R. 109 (Reserved) 35.I.03 revised effective December 21, 2024

Chapter 04 Electronic Filing and Payments

35 Miss. Admin. Code Pt. 1, R. 100 Definitions

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35 Miss. Admin. Code Pt. 1, R. 101 Rule 101

“ACH” – Automated Clearing House – A central distribution and settlement point for the electronic clearing of debits and credits between financial institutions rather than the physical movement of paper items.

35 Miss. Admin. Code Pt. 1, R. 102 Rule 102

“ACH Credit” – The electronic funds transfer payment method where the transactions are initiated and generated by the taxpayer, cleared through the system for deposit to the State Treasury.

35 Miss. Admin. Code Pt. 1, R. 103 Rule 103

“ACH Debit” – The electronic funds transfer payment method where transactions are generated by the Department upon the taxpayer’s instruction and cleared through the ACH system for deposit to the State Treasury.

35 Miss. Admin. Code Pt. 1, R. 104 Rule 104

“Addenda Record” – The information required by the Department in an ACH Credit transfer in an approved electronic format.

35 Miss. Admin. Code Pt. 1, R. 105 “Department” – The Mississippi Department of Revenue

35 Miss. Admin. Code Pt. 1, R. 106 Rule 106

“Due Date” – The date on or before which a return filing or payment is required to be made by a taxpayer under a revenue law of this state.

35 Miss. Admin. Code Pt. 1, R. 107 Rule 107

“EFT” – Electronic Funds Transfer – Any transfer of funds initiated through an electronic terminal, telephone instrument, computer or magnetic tape so as to order, instruct, or authorize a financial institution to debit or credit an account using the methods specified in this rule.

35 Miss. Admin. Code Pt. 1, R. 108 Rule 108

“Payment Information” – The data that the Department requires of a taxpayer making an EFT payment.

35 Miss. Admin. Code Pt. 1, R. 109 “State Treasury” – The Treasury of the State of Mississippi

35 Miss. Admin. Code Pt. 1, R. 110 “TAP” – Taxpayer Access Point

35 Miss. Admin. Code Pt. 1, R. 111 Rule 111

“Taxpayer” – Any person required to file and remit an amount to the Department whether it is for a tax, fee, license, or any other obligation. For the purpose of this rule, “person” includes any individual, firm, association, corporation, estate, trust, business trust, receiver, syndicate, or other group or combination acting as a unit, and includes the plural as well as the singular number.

35 Miss. Admin. Code Pt. 1, R. 112 Rule 112

“Wire Transfer” – An instantaneous electronic funds transfer generated by the taxpayer to the State Treasury.

35 Miss. Admin. Code Pt. 1, R. 113 (Reserved)

35 Miss. Admin. Code Pt. 1, R. 200 General

35 Miss. Admin. Code Pt. 1, R. 201 Rule 201

Miss. Code Ann. Section 27-3-83 provides that the Department may specify by rule or regulation the manner and method in which tax returns, supporting schedules,

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information returns, applications for permits, licenses or titles, powers of attorney, Review Board appeal petitions, and other documents and information may be filed with the Department. Such filings may be accomplished by submitting the forms or documents manually or by submitting them electronically.

35 Miss. Admin. Code Pt. 1, R. 202 Rule 202

Miss. Code Ann. Section 27-3-81 provides that the Department, consistent with the cash management policies of the State Treasurer, may require any person owing twenty thousand dollars ($20,000) or more in connection with any return, report, or other document filed with the Department to remit any such tax liability by any such means established by the Department, with the approval of the State Treasurer, which ensures the availability of such funds to the State on the date of payment to the State Treasury.

35 Miss. Admin. Code Pt. 1, R. 203 Rule 203

In addition to the filing requirements listed in the Sections above, the Department has implemented an online electronic filing program, known as TAP. This program allows taxpayers to register a tax account, file certain tax returns and related documents, and make payments electronically.

35 Miss. Admin. Code Pt. 1, R. 204 Rule 204

The Department may specify the manner and method in which the electronic filing and the electronic payment may be made for each type of tax administered by the Department. In addition, the Department shall provide the necessary written instructions and procedures to the taxpayer and/or their agent in a reasonable time frame in advance of any due dates to allow compliance with filing requirements. Notification shall be made at least ninety (90) days in advance of the requirement to begin filing. Any taxpayer or taxpayer’s agent may voluntarily file tax returns and related documents electronically.

35 Miss. Admin. Code Pt. 1, R. 205 Rule 205

The Department requires taxpayers subject to the following taxes to file tax returns, related documents, and any corresponding tax payments by TAP: 1. 911 Emergency Fee 2. Beer Excise 3. City Utility 4. Compressed Gas and Decals 5. County Sales and Use (Casual Auto and Use Tax Collected by County) 6. Environmental Protection Fee 7. Gaming 8. Gas and Fuel Users 9. Gas Severance 10. Gasoline 11. International Fuel Tax Agreement (IFTA)(if more than ten (10) jurisdictions or power units) 12. Insurance Premium 13. International Registration Plan (IRP) (if more than ten (10) jurisdictions or power units) 14. Lubricating Oil 15. Motor Vehicle Rental 16. Motorcycle ATV Trauma Care

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Municipal Gas Utility Regulatory 18. Nuclear in Lieu 19. Occupancy 20. Oil Severance 21. Prepaid Wireless E911 22. Public Utility Regulatory 23. Railcar In Lieu 24. Railroad Regulatory 25. Seawall 26. Special Fuel 27. Statewide Privilege 28. Tire Disposal 29. Tobacco Excise and Stamps 30. TVA In Lieu 31. Wage or Withholding Information Returns with ten (10) or more W-2s or 1099s 32. Waste Disposal Fee (Hazardous and Non-Hazardous)

35 Miss. Admin. Code Pt. 1, R. 206 Rule 206

ACH Debit payments are submitted by logging into the taxpayer’s TAP account. The payment must be submitted on TAP by midnight Central Standard Time on the due date to be considered timely. The payment of taxes through EFT does not relieve the taxpayer from filing the appropriate tax returns or applicable information returns required by the Department.

35 Miss. Admin. Code Pt. 1, R. 207 Rule 207

The Department allows taxpayers to use the ACH Credit payment method. The Department may require a taxpayer to make future payments by the ACH Debit payment method if a taxpayer has repeatedly failed to correctly complete the payment transactions.

35 Miss. Admin. Code Pt. 1, R. 208 Rule 208

An ACH Credit payment must be transferred to the State of Mississippi’s bank account by the due date of the taxes. A taxpayer must ensure that the financial institution originating the transaction does so in sufficient time for the payment to be deposited as immediately available funds to the State Treasury on or before the appropriate due date of payment. If the due date falls on a holiday or weekend, payment must be initiated to be received by the State of Mississippi’s bank on the first business day after the due date.

35 Miss. Admin. Code Pt. 1, R. 209 Rule 209

The taxpayer is responsible for ensuring that the financial institution initiating the ACH payment provides the correct information in the TXP Banking Convention Addenda Record of the Payment Transactions. A separate ACH Credit payment must be initiated for each tax type liability. All ACH Credit transactions must utilize the NACHA CCD+ entry with a TXP Banking Convention Addenda Record.

35 Miss. Admin. Code Pt. 1, R. 210 Rule 210

The Department allows for the following payment procedures for wire transfers: 1. Taxpayers who, due to circumstances beyond their reasonable control, are unable to initiate a timely payment of tax through the ACH Debit method may request the Department’s permission to transmit payments of tax to the State Treasurer’s account via wire transfer. Prior to initiating the transmission, the

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taxpayer must contact the Department. The taxpayer must present the emergency situation that prevents timely compliance under the ACH Debit method and request approval to wire the tax payments in question to the State Treasury. 2. Taxpayers who are granted approval to use wire transfer as an exception to the ACH Debit method will be given specific instructions regarding the payment information that must accompany the wire transfer. 3. Wire transfers that are not received by the State Treasury on or before the due date will constitute late payment and the applicable late filing penalty, interest, and loss of taxpayer discount will apply. 4. As the originator of an ACH transaction, the cost of each wire transfer will be paid by the taxpayer.

35 Miss. Admin. Code Pt. 1, R. 211 Rule 211

Entering the password to the taxpayer’s online account will provide authorization for payment and filing of tax returns. This shall serve the same function as signing and dating a document which shall also be a certification under oath that all information contained in the return, report, application for permit, or document is true and correct.

35 Miss. Admin. Code Pt. 1, R. 212 Rule 212

Any person knowingly submitting information in a return, report, or other document electronically filed with the Department that is false or affixing an electronic signature to a return, report, or document electronically filed with the Department on behalf of another person or entity without the authority to do so shall be guilty of perjury and, upon conviction, shall be punished by imprisonment in the State Penitentiary for a term not exceeding ten (10) years.

35 Miss. Admin. Code Pt. 1, R. 213 Rule 213

Any electronic funds transfer used to pay tax amounts due for an electronically filed return or report shall not be considered a completed payment by the taxpayer until the funds are properly credited to the account of the Department.

35 Miss. Admin. Code Pt. 1, R. 214 Rule 214

All payment authorizations, returns, reports, applications for permits, and other documents electronically filed with the Department in accordance with the method and manner specified by the Department shall be preserved electronically by the Department for the period required for that return, report, application for permit, or document by any applicable record retention schedule. The Department will determine the form and medium by which the payment, return, report, application for permit, and document shall be preserved. The reproduction of any return, report, or document maintained electronically, or the reproduction of information from such returns, reports, or documents placed on computer storage devices by electronic means, shall be deemed to be the original of such return, report, or document when certified by the Commissioner under seal in accordance with Miss. Code Ann. Section 27-3-83. 215 (Reserved)

35 Miss. Admin. Code Pt. 1, R. 300 E-filing Mandate

35 Miss. Admin. Code Pt. 1, R. 301 Rule 301

Pass-Through Entities that issue one hundred (100) or more K-1s must file their return electronically.

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35 Miss. Admin. Code Pt. 1, R. 302 Rule 302

Corporations, S Corporations, and Partnerships with assets of two hundred and fifty thousand dollars ($250,000) or more must file electronically for tax years beginning on or after January 1, 2019, and all subsequent tax years. 303 (Reserved)

35.I.04 revised effective December 21, 2024.

Chapter 05 Collection Procedures for Levy of Monies

35 Miss. Admin. Code Pt. 1, R. 100 General

35 Miss. Admin. Code Pt. 1, R. 101 Rule 101

This regulation is promulgated to establish a uniform method and procedure for the administration of Distress Warrants for the Levy of Monies Owed to Taxpayer (Distress Warrants) issued by the Commissioner of Revenue, and it is intended to apply to all such Distress Warrants issued by the Commissioner of Revenue regardless of the type of tax involved in the Distress Warrant. This regulation is promulgated to supplement all other rules and regulations adopted by the Department and/or the Commissioner of Revenue for the various taxes for which a Distress Warrant can be issued.

35 Miss. Admin. Code Pt. 1, R. 102 Rule 102

Pursuant to Miss. Code Ann. Section 27-3-33(4), warrants issued by the Commissioner of Revenue for the collection of taxes shall be used to levy on salaries, compensation, or other monies due to the delinquent taxpayer. Such warrants for the levy of monies will be issued in the same manner as any warrant for the collection of taxes issued by the Commissioner of Revenue. It shall be issued under the official seal of the Department and only after a tax lien has been enrolled on the state tax lien registry. After issuance, the warrant must be served by mail or by hand delivery of said warrant by an agent of the Department to the person or entity named as garnishee. The agent shall execute a Proof of Service indicating on what date and upon whom the warrant was served. This Proof of Service is to be sent by the agent to the Department where it is to be retained as a part of the file on said warrant.

35 Miss. Admin. Code Pt. 1, R. 103 Rule 103

Within thirty (30) days from the date of service of the Distress Warrant, the person or entity served must file with the Department an Answer in which the person or entity answers, under oath, the questions set forth on said Distress Warrant. This Answer may be submitted by one of the methods described below: 1. Submit by mail or facsimile to the Lien Administration Bureau of the Department the prepared form titled Answer to Distress Warrant. 2. Submit by e-mail to the Lien Administration Bureau of the Department the completed Levy Response form. Prior to using this method of answering the Distress Warrant, the Levy Response Agreement Request must be submitted and approved. For entities who receive twenty-five (25) or more levies in a delivery, a document containing levy information will be e-mailed to the entity to be completed and returned by e-mail to the Lien Administration Bureau of the Department. For entities who receive less than twenty-five (25) levies in a

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delivery, single-answer e-mails should be submitted to the Lien Administration Bureau of the Department. 3. Submit through TAP, which the Garshniee may access on the Department’s website. To submit an answer using this method, the submitting individual or entity does not need a TAP account, only the letter ID number which is printed in the upper right-hand corner of the letter, and the last four digits of the taxpayer’s social security number.

35 Miss. Admin. Code Pt. 1, R. 104 Rule 104

It is the responsibility of the person or entity served with a Distress Warrant to remit to the Department monies levied by the Distress Warrant. The extent to which monies are levied by the Distress Warrant is governed by garnishment laws of this State and will vary depending on the type of indebtedness for which said monies are owed to the taxpayer(s) and the existence of a prior warrant or garnishment. The extent to which monies are levied and required to be remitted under a Distress Warrant is as outlined below.

35 Miss. Admin. Code Pt. 1, R. 105 Rule 105

A Distress Warrant being issued by the Commissioner of Revenue for the collection of state taxes is excepted from the restrictions contained in Miss. Code Ann. Section 85- 3-4 (1) and (2), and 15 U.S.C. Section 1673(a) on attachment, execution, or garnishment of wages, salaries, or other employment compensation. Without these restrictions, the entire disposable earnings of a taxpayer are subject to being levied. Recognizing the hardship that would result if a person’s entire disposable earnings are levied for an extended period, it is hereby determined that in most cases the amount of wages, salaries, or other employment compensation owed to a delinquent taxpayer which is to be levied and withheld under a Distress Warrant should be less than the entire disposable earnings.

35 Miss. Admin. Code Pt. 1, R. 106 Rule 106

Unless otherwise determined and directed as authorized under sections below, the amount of wage, salaries, or other employment compensation owed to a delinquent taxpayer which is to be levied by Distress Warrant is hereby limited to the following: 1. Monies owed to the defaulting taxpayer for wages, salaries, or other employment purposes are not bound by the Distress Warrant for the first thirty (30) days after service of the Distress Warrant, and such monies which become due to the defaulting taxpayer before or during this initial thirty (30) day period for wages, salaries or other employment compensation are to be paid over to the defaulting taxpayer. 2. For all monies for indebtedness for wages, salaries, or other employment compensation that becomes due to the defaulting taxpayer after the initial thirty (30) day period, the employer shall withhold twenty-five percent (25%) of the defaulting taxpayer’s disposable earnings per pay period until the Distress Warrant is satisfied. Disposable earnings are part of the earnings of an individual remaining after the deduction from those earnings of any amounts required to be withheld by law. 3. If the defaulting taxpayer leaves the employment of the person or entity served with a Distress Warrant after the initial thirty (30) day period from service of the

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warrant, the employer shall withhold one hundred percent (100%) of the defaulting taxpayer's final disposable earnings or such lesser amount that will satisfy the warrant.

35 Miss. Admin. Code Pt. 1, R. 107 Rule 107

The authority to increase or decrease the amount or percentage of wages, salaries, and other employment compensation levied under a Distress Warrant from that set out in the subsection above is hereby reserved by the Commissioner of Revenue. In such cases where a different amount or percentage of disposable earnings from that set out in the subsection above is determined to be levied and withheld under a Distress Warrant, the Distress Warrant issued to levy such wages, salaries, and other employment compensation in a different amount or percentage from that set out in the subsection above shall clearly set out the amount or percentage of disposable earnings to be levied and withheld under said Distress Warrant.

35 Miss. Admin. Code Pt. 1, R. 108 Rule 108

Monies owed to the defaulting taxpayer for indebtedness other than for wages, salaries, or other employment compensation are levied and bound by a Distress Warrant at the time that this warrant is served up to the amount of the warrant. The person or entity served is required to withhold all monies owed to the defaulting taxpayer at the time of service of the warrant for such non-employment indebtedness up to the amount of the warrant. In regard to such non-employment indebtedness, a Distress Warrant also binds and requires to be withheld any monies for such indebtedness which becomes due to the defaulting taxpayer after service of the warrant, but before the expiration of the thirty (30) day period during which the person or entity served has to answer the warrant to the extent that monies previously bound under the warrant are not sufficient to satisfy the warrant. The aggregate of all monies bound and withheld under the warrant, whether for non-employment indebtedness which was due at the time of service or which became due during the first thirty (30) days after service, shall not exceed the amount of the warrant.

35 Miss. Admin. Code Pt. 1, R. 109 Rule 109

If a bank is issued a Distress Warrant, the bank may place a freeze on the taxpayer’s account for thirty (30) days, capturing all deposits up to the amount owed to the Department. These funds are to be held and remitted thirty (30) days after the levy is received. Even if the answer is filed before the expiration of the thirty (30) days and only a percentage of the amount governed by the levy has been captured, the bank is still required to capture additional deposits up to the amount due on the levy and remit the total to the Department at the end of the thirty (30) days. If a bank participates in the Financial Institution Data Match (FIDM) program, the levy only applies to the funds on deposit at the time the bank receives and answers the levy. If the bank answers on the same day it receives the levy, then it is only responsible for the amount available at that time. In this scenario, the thirty (30) day holding period is bypassed.

35 Miss. Admin. Code Pt. 1, R. 110 Rule 110

If the person or entity served by a Distress Warrant is subject to multiple warrants and/or garnishments of the same defaulting taxpayer, the order in which such warrants and garnishments are to be withheld and satisfied is to be governed by Miss. Code Ann. Section 11-35-24 with the warrant being treated as if it is a garnishment. This priority does not, however, apply to an Order of Withholding under Miss. Code Ann. Section

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93-11-111 in regard to the defaulting taxpayer, since, by statute, such Order of Withholding is not considered to be a garnishment. If the person or entity served with the Distress Warrant is at the time of service of the warrant or at some later time required to withhold from defaulting taxpayer’s wages under an Order of Withholding for child support, the full amount of the monies to be withheld under the warrant is still to be withheld per pay period to the extent that there are disposable earnings remaining after the monies under the Order of Withholding have been withheld. The person or entity served is to withhold first for the amount under the Order of Withholding and then for the amount under the warrant. In such cases, the amount of disposable earnings that is levied under the warrant is to be determined as with any other warrant without any deduction or adjustment for the monies paid under the Order of Withholding. The amount resulting from this computation will be the amount to be withheld and remitted under the warrant unless it is greater than the difference between the total amount of disposable earnings and the amount to be withheld under the Order of Withholding in which case this difference will be the amount to be withheld and remitted.

35 Miss. Admin. Code Pt. 1, R. 111 Rule 111

All payments to the Department of monies levied under a Distress Warrant shall reflect the name of the defaulting taxpayer, the warrant number, and the Garnishee identification number. If a person or entity required to remit monies under a Distress Warrant desires a different period for the remittance of monies from that set out above, such person or entity can make a request to the Commissioner of Revenue for a change in this period. Such a request shall be made in writing and shall include therein the reasons for requesting the change. Upon consideration of this request, the Commissioner of Revenue or his designee shall advise the requesting person or entity as to whether the request is granted.

35 Miss. Admin. Code Pt. 1, R. 112 Rule 112

If a person or entity served with a Distress Warrant fails to withhold and/or remit to the Department the monies bound and levied by the warrant, the person or entity served shall be personally liable to the Department for said monies. If after the expiration of the period for the remittance of the monies bound and levied under a Distress Warrant, the Commissioner of Revenue finds that the person or entity served with the warrant did not remit to the Department all monies bound, levied and required to be remitted under the warrant, the Commissioner of Revenue will assess said person or entity for the taxes, penalties, interest, and cost included in the warrant in the amount of the monies which were bound and levied under the warrant, but which were not remitted, and must advise the person or entity served of his personal liability for said monies, demand payment of same, and further advise the person or entity served that levy and collection process may be issued against him for said liability. If payment of this liability is not forthcoming, the Commissioner may issue, in the same manner as other taxes, levy, and collection processes against the person or entity served to collect this personal liability for monies that should have been remitted under the warrant.

35 Miss. Admin. Code Pt. 1, R. 113 (Reserved)

35.I.05 revised effective December 21, 2024.

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Chapter 06 Uniform State Tax Lien Registry 100 Definitions

35 Miss. Admin. Code Pt. 1, R. 101 Rule 101

“Debtor” means a person that has an unpaid finally determined tax liability for a tax administered by the Mississippi Department of Revenue.

35 Miss. Admin. Code Pt. 1, R. 102 Rule 102

“Finally determined tax liability” means any state tax, fee, penalty, and/or interest owed by a person to the Department of Revenue where the assessment of the liability is not subject to any further timely filed administrative or judicial review.

35 Miss. Admin. Code Pt. 1, R. 103 Rule 103

“Tax Lien” means a legal claim, by the Department of Revenue on property of a noncompliant person, to secure the payment of finally determined tax liabilities.

35 Miss. Admin. Code Pt. 1, R. 104 (Reserved)

35 Miss. Admin. Code Pt. 1, R. 200 General

35 Miss. Admin. Code Pt. 1, R. 201 Rule 201

The Uniform State Tax Lien Registry, (Registry) serves as public notice of state tax debt and is the public database maintained by the Department of Revenue where state tax liens may be enrolled for finally determined tax liabilities.

35 Miss. Admin. Code Pt. 1, R. 202 Rule 202

A tax lien is enrolled in favor of the State and attaches upon all existing and after- acquired property of the debtor, including real, personal, tangible, and intangible property which is located in any and all counties within the State of Mississippi.

35 Miss. Admin. Code Pt. 1, R. 203 Rule 203

A tax lien is valid for seven years from the date of enrollment unless the tax lien is re- enrolled before the end of the seven-year period. The re-enrollment extends the tax lien another seven years from the date of re-enrollment. A tax lien may be re-enrolled until the tax lien is paid in full. Tax liens may be enrolled at any time after the seven years have elapsed. Said enrollment is a new tax lien on the pre-existing debt. 204 The priority of a state tax lien is determined from the date of its enrollment. For any re- enrolled tax liens, the date of its original enrollment will determine the priority of the tax lien so long as there was no lapse in enrollment during the seven years that the tax lien was valid. A tax lien enrolled after the seven years have lapsed shall lose its previous priority and the date will be the new enrollment date. This rule applies to tax liens originally enrolled with the county Circuit Clerk prior to the establishment of the Registry on January 1, 2015, as well as those tax liens enrolled after the creation of the Registry. However, for tax liens enrolled with a county Circuit Clerk, the prior enrollment date is only the priority date for property in the county where the tax lien was enrolled. For any tax lien enrolled prior to January 1, 2015, in one or more counties, the new priority date for any property outside of the county where originally enrolled is January 1, 2015.

35 Miss. Admin. Code Pt. 1, R. 205 (Reserved)

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35 Miss. Admin. Code Pt. 1, R. 300 Rule 300

Using the Registry 301 Searches may be performed at no charge. However, there will be a charge for any bulk distribution of the Registry. The Lien Administration Bureau at the Department can provide assistance with registering to obtain this information.

35 Miss. Admin. Code Pt. 1, R. 302 Rule 302

The information obtained through bulk distribution of the Registry shall not be used for survey, marketing, or solicitation purposes.

35 Miss. Admin. Code Pt. 1, R. 303 Rule 303

The Registry is accessible at www.liens.ms.gov. 304 The Registry supports a search by tax lien number or debtor name, which includes individual names or business names. Debtor name searches may be further limited by the city and/or county of the Department’s last known address for the debtor. However, the Department cannot and does not guarantee that the last known address is accurate.

35 Miss. Admin. Code Pt. 1, R. 305 Rule 305

The Registry shall maintain tax lien information in a form that permits such information to be printed to written form. Information to be identified includes: 1. The name of the debtor; 2. The last known address of the debtor; 3. The name and address of the Department; 4. The tax lien number assigned to the tax lien by the Department; 5. The total amount of tax, penalty, interest, and costs through the date of enrolling the tax lien; 6. The date of original enrollment of the tax lien, along with the county where originally filed if applicable; and 7. The date of re-enrollment of the tax lien, if applicable.

35 Miss. Admin. Code Pt. 1, R. 306 (Reserved)

35 Miss. Admin. Code Pt. 1, R. 400 Releasing a Tax Lien

35 Miss. Admin. Code Pt. 1, R. 401 Rule 401

The Department shall file in the Registry a notice of cancellation of the tax lien when the liability is paid in full or when additional documentation is provided that resolves the liability. Tax liens canceled due to full payment or documentation being provided will not be removed from the Registry but only noted as canceled due to being satisfied.

35 Miss. Admin. Code Pt. 1, R. 402 Rule 402

Payment in full includes payment of the total amount due. The amount due may include adjustments for prior payments made toward satisfying the liability, additional interest and penalty accrued on the balance of the liability to date, or adjustments resulting from filing documentation that may resolve the liability partially or in full. 403 A tax lien enrolled with the Registry requiring administrative correction by the Department will be canceled within two working days of determination with the tax lien being removed from the Registry. The Department will issue a letter to the debtor verifying that the tax lien was canceled and removed from the Registry due to an

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administrative correction and therefore void. Because the tax lien is removed from the Registry, the debtor can access additional copies of the letter through their TAP account.

35 Miss. Admin. Code Pt. 1, R. 404 Rule 404

A tax lien is considered public information once enrolled and may be obtained by a credit bureau company. The Department does not govern the credit bureau company or its report. A debtor will be responsible for contacting the credit bureau company to resolve any dispute about the accuracy of any credit report. 405 A tax lien concerning a particular property may be released if the Department determines that the consideration paid for the release reflects the extent to which the tax lien being released attached to this particular property and that the issuance of this partial release will not jeopardize the collection of taxes, interest, penalties, or other costs due to the State. Requests for a partial release should be submitted to the Chairman of the Board of Review for the Department. The requests should include identifying information on the property involved, including a legal description of real property, the reason for the request, and a statement of the consideration offered for the partial release. Any other information that would assist in the consideration of a partial release request should also be provided. Examples include sales documents and copies of other tax liens and encumbrances, if applicable. 406 A tax lien cancellation letter will be sent to the debtor using available communication methods utilized in the daily operations of the Department.

35 Miss. Admin. Code Pt. 1, R. 407 (Reserved)

35.I.06 revised effective December 21, 2024.

Chapter 07 Justice Court Collections Payment Program

35 Miss. Admin. Code Pt. 1, R. 100 General

35 Miss. Admin. Code Pt. 1, R. 101 Rule 101

The Department is responsible for the administration of the Justice Court Collections Payment program, the disbursement of monies to participating counties when appropriated by the legislature, and for ensuring that the justice court system of a participating county practices proper and effective collection procedures for the collection of fines and other assessments.

35 Miss. Admin. Code Pt. 1, R. 102 Rule 102

Counties must qualify in order to participate in the disbursements from the Justice Court Collections Payment Program. To qualify, the Board of Supervisors of a county must contract with a private attorney or private collection agent or department to collect delinquent fees, fines, and other assessments as provided by Miss. Code Ann. Section 19-3-41(2). Using a county employee for these services does not qualify the county to receive the distribution. The county must submit to the Department the following information in order to be considered as participating: 1. The name of the county;

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The name and address of the person or department that will be the contact for this program; and 3. A copy of the contract made with the collection entity including the services being performed and the time frame governed by the contract.

35 Miss. Admin. Code Pt. 1, R. 103 Rule 103

The Department will issue a letter to the county either approving or denying participation in the disbursements from the Justice Court Collections Payment Program. The participating county becomes eligible for disbursements on the effective date of the contract. Disbursements begin the quarter following qualification of participation and are retroactive to the effective date of the contract, as long as the effective date is within the same fiscal year (July 1 - June 30). The county must notify the Department in writing upon early termination or discontinuance of the contract. In order to maintain participation in the Justice Court Collections Payment Program a valid contract must be provided annually to the Department by the anniversary date indicated in the approval of participation letter.

35 Miss. Admin. Code Pt. 1, R. 104 Rule 104

An assessment is collected by the justice court system from each person upon whom the court imposes a fine or other penalty for any misdemeanor specified as “other misdemeanors” in Miss. Code Ann. Section 99-19-73(6). The assessments are then remitted to the Department of Finance and Administration (DFA) in the normal monthly settlements. The DFA accounts for and deposits the money into the General Fund. By the end of the month following the end of each calendar quarter, the Department will calculate the total amount that should be distributed from the Justice Court Collections Payment Program to each participating county using DFA accounting reports. The Department will then send the calculated distribution amount to each participating county.

35 Miss. Admin. Code Pt. 1, R. 105 Rule 105

The maximum amount that a county may receive from the program is equal to the amount of deposits made into the General Fund by that county from “other misdemeanor” fines or penalties.

35 Miss. Admin. Code Pt. 1, R. 106 Rule 106

Per Miss. Code Ann. Section 9-11-35, disbursements of money from the program may only be used to provide support for the following: 1. Salaries for justice court personnel; 2. Purchase, operation, and maintenance of software and equipment; 3. Facility planning and improvement; 4. Other expenses incurred for the purpose of collecting fines and assessments within the justice court system; and 5. Defraying costs associated with collection actions under Miss. Code Ann. Section 19-3-41(4) for the collection of delinquent fines and other assessments.

35 Miss. Admin. Code Pt. 1, R. 107 (Reserved)

35 Miss. Admin. Code Pt. 1, R. 200 Collection Procedures for a Participating County

35 Miss. Admin. Code Pt. 1, R. 201 Rule 201

Payment of fines and other assessments within the justice court system is due at the time

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assessed. If the individual cannot pay at that time, a record of the assessment should be made. The record should contain the date of the assessment, the reason for the assessment, the amount of the assessment, any amount paid against the assessment, and the name, address, and phone number of the person assessed. After thirty (30) days, if payment has not been received, a letter requesting payment should be mailed to the last known address. If payment is not received after an additional thirty (30) days, a phone call should be made. These fines and other assessments are determined to be delinquent after ninety (90) days and may be turned over to a private attorney or private collection agency or agent.

35 Miss. Admin. Code Pt. 1, R. 202 Rule 202

There shall be due to the county from any person whose delinquent payment is collected pursuant to a contract executed under Miss. Code Ann. Section 19-3-41 an amount, in addition to the delinquent payment, not to exceed twenty-five percent (25%) of the delinquent payment for collections made within this state and not to exceed fifty percent (50%) of the delinquent payment for collections made outside of this state.

35 Miss. Admin. Code Pt. 1, R. 203 Rule 203

The additional fees referred to in paragraph 202 above are not deposited into the General Fund. 204 (Reserved) 35.I.07 revised effective December 21, 2024

Chapter 08 Municipal Court Collections Payment Program

35 Miss. Admin. Code Pt. 1, R. 100 General

35 Miss. Admin. Code Pt. 1, R. 101 Rule 101

The Department is responsible for the administration of the Municipal Court Collections Payment Program, the disbursement of monies to participating cities when appropriated by the legislature, and for ensuring that the municipal court system of a participating municipality practices proper and effective collection procedures for the collection of fines and other assessments. 102 Municipalities must qualify in order to participate in the disbursements from the Municipal Court Collections Payment Program. To qualify, the governing authority of a municipality must contract with a private attorney or private collection agent or department to collect delinquent fees, fines, and other assessments as provided by Miss. Code Ann. Section 21-17-1(6). Using a municipal employee for these services does not qualify the municipality to receive the distribution. The municipality must submit to the Department the following information in order to be considered as participating: 1. The name of the municipality; 2. The name and address of the person or department that will be the contact for this program; and

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A copy of the contract made with the collection entity including the services being performed and the time frame governed by the contract.

35 Miss. Admin. Code Pt. 1, R. 103 Rule 103

The Department will issue a letter to the municipality either approving or denying participation in the disbursements from the Municipal Court Collections Payment Program. The participating municipality becomes eligible for disbursements on the effective date of the contract. Disbursements begin the quarter following qualification of participation and are retroactive to the effective date of the contract, as long as the effective date is within the same fiscal year (July 1 - June 30). The municipality must notify the Department in writing upon early termination or discontinuance of the contract. In order to maintain participation in the Municipal Court Collections Payment Program, a valid contract must be provided annually to the Department by the anniversary date indicated in the approval of participation letter.

35 Miss. Admin. Code Pt. 1, R. 104 Rule 104

An assessment is collected by the municipal court system from each person upon whom the court imposes a fine or other penalty for any misdemeanor specified as “other misdemeanors” in Miss. Code Ann. Section 99-19-73(6). The assessments are then remitted to the Department of Finance and Administration (DFA) in the normal monthly settlements. The DFA accounts for and deposits the money into the General Fund. By the end of the month following the end of each calendar quarter, the Department will calculate the total amount that should be distributed from the Municipal Court Collections Payment Program to each participating municipality using DFA accounting reports. The Department will then send the calculated distribution amount to each participating municipality.

35 Miss. Admin. Code Pt. 1, R. 105 Rule 105

The maximum amount that a county may receive from the program is equal to the amount of deposits made into the General Fund by that county from “other misdemeanor” fines or penalties.

35 Miss. Admin. Code Pt. 1, R. 106 Rule 106

Per Miss. Code Ann. Section 21-23-23, disbursements of money from the program may only be used to provide support for the following: 1. Salaries for municipal court personnel; 2. Purchase, operation, and maintenance of software and equipment; 3. Facility planning and improvement; 4. Other expenses incurred for the purpose of collecting fines and assessments within the municipal court system; and 5. Defraying costs associated with collections actions when a municipality uses its own employees to collect delinquent fines and other assessments owed.

35 Miss. Admin. Code Pt. 1, R. 107 (Reserved)

35 Miss. Admin. Code Pt. 1, R. 200 Collection Procedures for a Participating Municipality

35 Miss. Admin. Code Pt. 1, R. 201 Rule 201

Payment of fines and other assessments within the municipal court system is due at the time assessed. If the individual cannot pay at that time, a record of the assessment should be made. The record should contain the date of the assessment, the reason for the

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assessment, the amount of the assessment, any amount paid against the assessment, and the name, address, and phone number of the person assessed. After thirty (30) days, if payment has not been received, a letter requesting payment should be mailed to the last known address. If payment is not received after an additional thirty (30) days, a phone call should be made. These fines and other assessments are determined to be delinquent after ninety (90) days and may be turned over to a private attorney or private collection agency or agent.

35 Miss. Admin. Code Pt. 1, R. 202 Rule 202

There shall be due to the municipality from any person whose delinquent payment is collected under a contract executed as provided in Miss. Code Ann. Section 21-17-1(6) an amount, in addition to the delinquent payment, not to exceed twenty-five percent (25%) of the delinquent payment for collections made within this state, and not to exceed fifty percent (50%) of the delinquent payment for collections made outside of this state.

35 Miss. Admin. Code Pt. 1, R. 203 Rule 203

The additional fees referred to in paragraph 202 above are not deposited into the General Fund.

35 Miss. Admin. Code Pt. 1, R. 204 (Reserved) 35.I.08 revised effective December 21, 2024

Part 2 Alcohol Beverage Control

35 Miss. Admin. Code Pt. 2, R. 101 (Reserved)

35.II.1.01 revised effective March 9, 2026

Chapter 02 Administrative Provisions

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

The Alcoholic Beverage Control Division is hereby empowered, authorized, and directed to carry out fully the provisions of Miss. Code Ann. Title 67 and these regulations.

35 Miss. Admin. Code Pt. 2, R. 101 Rule 101

It is the intent of the Department that each and every one of these regulations, and parts thereof, are independent from the other; that each could stand alone; and to this end the provisions of these regulations, and parts thereof, are severable.

35 Miss. Admin. Code Pt. 2, R. 102 Rule 102

All records of any person holding a permit issued pursuant to Miss. Code Ann. Section 67-1-51 shall be open for examination at any time by the Department or its duly authorized agents.

35 Miss. Admin. Code Pt. 2, R. 103 (Reserved)

Chapter 03 Appeal Procedures

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

Pursuant to Miss. Code Ann. Section 67-1-72, certain decisions of the Department may be appealed. Any request for such appeal shall be made to the Board of Tax Appeals.

35 Miss. Admin. Code Pt. 2, R. 101 Rule 101

The following decisions of the Department may be appealed: 1. Denial of an application 2. Denial of a permit renewal 3. Revocation of a permit 4. Suspension of a permit 5. Denial of an applicant for approved manager 6. Revocation or suspension of approved manager designation 7. Denial of a request for qualified resort area status 8. Revocation of a qualified resort area status

35 Miss. Admin. Code Pt. 2, R. 102 Rule 102

The procedures for filing an appeal shall be: 1. The aggrieved person must submit a request for appeal in writing; 2. The request must be submitted to the Executive Director of the Board of Tax Appeals and a copy must be sent to the Department; and 3. The request must be made within fifteen (15) days of the date the person received notice from the Department.

35 Miss. Admin. Code Pt. 2, R. 103 Rule 103

If the aggrieved person fails to appeal within the fifteen (15) day period, the action of the Department shall take effect as set out in the notice.

35 Miss. Admin. Code Pt. 2, R. 104 The Department retains the authority to change its decision

35 Miss. Admin. Code Pt. 2, R. 105 Rule 105

If the decision of the Department is due to an incomplete application, failure of the applicant to pay the annual privilege taxes and fees pursuant to Miss. Code Ann. Section 27-71-5 or failure of the applicant to post the required bond, then the decision of the Department does not constitute a denial and may not be appealed.

35 Miss. Admin. Code Pt. 2, R. 106 Rule 106

No permit shall be suspended or revoked until the permittee has been given reasonable notice of the reason for suspension or revocation. The permittee shall be given the opportunity to appeal the suspension or revocation to the Board of Tax Appeals.

35 Miss. Admin. Code Pt. 2, R. 107 Rule 107

The permittee may waive his rights to reasonable notice and/or the opportunity to a hearing by agreeing to a suspension or revocation as offered by the Department.

35 Miss. Admin. Code Pt. 2, R. 108 Rule 108

If an applicant fails to timely request a hearing after notification of the request for suspension or revocation, the applicant is considered to have had an opportunity for a hearing.

35 Miss. Admin. Code Pt. 2, R. 109 (Reserved)

35 Miss. Admin. Code Pt. 2, R. 200 Rule 200

If an application for renewal of a permit has been denied by the Department for any reason other than incompleteness, failure to pay applicable privilege taxes and fees or failure to post any required bond, the permittee may continue to operate under the permit until the last of the following dates: 1. The date on which the permit expires; 2. The date on which the time period for filing an appeal of the denial to the Board of Tax Appeals expires; 3. The date of withdrawal of a timely filed appeal to the Board of Tax Appeals; or 4. The date on which the permittee receives the notice of the Board of Tax Appeals affirming the denial of the permit renewal.

35 Miss. Admin. Code Pt. 2, R. 201 Rule 201

If the Board of Tax Appeals reverses the Department’s decision to deny the renewal, the Department shall renew the permit and issue the permit from its last expiration date.

35 Miss. Admin. Code Pt. 2, R. 202 Rule 202

The Department has the authority to appeal the decision of the Board of Tax Appeals to chancery court pursuant to Miss. Code Ann. Section 67-1-39. If the court enters a final decision and/or order reversing the decision of the Board and affirms the denial of renewal of the permit, the permit shall be deemed denied and the permittee is not authorized to sell alcoholic beverages under that permit after the date the court decision becomes final and is not subject to any further appeal.

35 Miss. Admin. Code Pt. 2, R. 203 (Reserved)

35 Miss. Admin. Code Pt. 2, R. 300 Rule 300

Any applicant that is aggrieved by the Department’s denial, revocation or suspension of approved manager designation may appeal the decision of the Department. Such appeal is to be

made to the Board of Tax Appeals following the procedures provided in Paragraph 102 of this Chapter.

35 Miss. Admin. Code Pt. 2, R. 301 Rule 301

Any applicant or holder of an approved manager designation may waive his rights to notice and opportunity to a hearing by agreeing to the action taken by the Department.

35 Miss. Admin. Code Pt. 2, R. 302 (Reserved)

35 Miss. Admin. Code Pt. 2, R. 400 Rule 400

The Department has the authority to approve or deny applications for qualified resort status as well as to revoke a current qualified resort status. Appeals for issues related to qualified resort status may be made by the applicant or permit holder; the county or municipality where the qualified resort status is located; or by any person objecting to the qualified resort area.

35 Miss. Admin. Code Pt. 2, R. 401 Rule 401

The Department has the discretion to publish notice of its decision to revoke approval of a qualified resort area in the same manner as provided in Title 35, Part II, Subpart 03, Chapter 07 of the Mississippi Administrative Code as it relates to approval of a qualified resort area. The fifteen (15) day period for appeals will begin on the date the notice is first published. If an appeal is not filed within this fifteen (15) day period, the decision of the Department is final.

35 Miss. Admin. Code Pt. 2, R. 402 Rule 402

Any county or municipality where a proposed qualified resort area is to be located or where a qualified resort area is currently located may appeal the decision of the Department to deny the request for approval or the revocation of the resort areas status. Such appeal shall be made to the Board of Tax Appeals and shall follow the procedures provided in Paragraph 102 of this Chapter.

35 Miss. Admin. Code Pt. 2, R. 403 (Reserved)

35 Miss. Admin. Code Pt. 2, R. 500 Rule 500

Any other person may also request a hearing before the Board of Tax Appeals related to: 1. Objections to an application for a qualified resort status; 2. Objections to the transfer of an existing permit; or 3. Objections to the issuance of any permit with the exception of a temporary retailer’s permit.

35 Miss. Admin. Code Pt. 2, R. 501 Rule 501

There will be no hearing in cases where the application is denied by the Department and the applicant does not appeal the Department’s decision or if the applicant withdraws the application; or if the county or municipality where the proposed qualified resort area is located does not appeal the Department’s decision.

35 Miss. Admin. Code Pt. 2, R. 502 Rule 502

If the Department denies the application, then the procedures found in this chapter for appeal of a denial of an application shall be in effect. The Department will advise the Executive Director and the applicant of any objection to the application and the Board of Tax Appeals shall schedule a hearing on the objection and a hearing on the appeal at the same time.

35 Miss. Admin. Code Pt. 2, R. 503 Rule 503

If the Department approves the application, then the Department will advise the applicant and the Executive Director of the request for a hearing on an objection to the application. The Board of Tax Appeals shall schedule a hearing on the objection.

35 Miss. Admin. Code Pt. 2, R. 504 Rule 504

The Department has the authority to approve the application if the person objecting to the application withdraws the request for hearing.

35 Miss. Admin. Code Pt. 2, R. 505 Rule 505

A request for a hearing on the objection must be filed with the Department within fifteen (15) days from the first date of publication of the notice of application pursuant to Miss. Code Ann. Section 67-1-53.

35 Miss. Admin. Code Pt. 2, R. 506 (Reserved)

35 Miss. Admin. Code Pt. 2, R. 600 Rule 600

Any person who has an interest in any alcoholic beverages or raw materials which the Department intends to dispose of under Miss. Code Ann. Section 67-1-18 shall be given a reasonable notice of the Department’s proposed disposal. Such person may request a hearing before the Board of Tax Appeals to establish a right or claim to the property.

35 Miss. Admin. Code Pt. 2, R. 601 Rule 601

Request for an appeal shall follow the same procedures set out in paragraph 102 of this Chapter.

35 Miss. Admin. Code Pt. 2, R. 602 Rule 602

If a request is not received within the fifteen (15) day period, then the Department may order the property to be disposed of pursuant to Miss. Code Ann. Section 67-1-18.

35 Miss. Admin. Code Pt. 2, R. 603 (Reserved)

35.II.01.03 revised effective April 1, 2018.

Subpart 02 Enforcement

Chapter 01 Violations

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

The Department may revoke or suspend any permit issued for a violation by the permittee or an agent or employee of the permittee of any provisions of the Local Option law or of any of the regulations promulgated by the Department. In taking such action the Department may consider prior offenses committed by the permittee and/or its agents or employees within a period of two (2) years from the date of the most recent offense.

35 Miss. Admin. Code Pt. 2, R. 101 Rule 101

Any person, firm, association, corporation, LLC, hotel, restaurant, or club defined in the Local Option law that violates the law, or knowingly permits the violation of the law upon its premises, may be subject to a revocation of their permit. When a permit is revoked the entity shall not be eligible to obtain any permit provided by Miss. Code Ann. Section 67-1-51 for a period of twelve (12) months after the date the revocation becomes final. Any “applicant” as defined by Miss. Code Ann. Section 67-1-59 for any such person or entity shall be ineligible to obtain a permit either as an individual or as an “applicant” for another entity should he or she commit or knowingly allow such permit violations. The “applicant” shall remain ineligible to obtain a permit for twelve (12) months from the date the revocation becomes final. This twelve (12) month prohibition shall not apply to those persons or entities whose permits are revoked due to their failure to maintain the qualification of paying all debts to the State, be it taxes or fees. Such entities are eligible to apply for a permit after paying the underlying outstanding debt.

35 Miss. Admin. Code Pt. 2, R. 102 Rule 102

In addition to suspension or revocation of permits, the Department may impose fines not to exceed one thousand dollars ($1,000.00) upon any person or entity for violations of the regulations promulgated by the Department. Failure of a permittee to pay fines within a time designated by the Department will result in revocation of the permit. Failure of a manufacturer

representative to pay fines may result in the suspension of the representative's products from sale in the State.

35 Miss. Admin. Code Pt. 2, R. 103 (Reserved)

35.II.2.01 revised effective December 1, 2018

Chapter 02 Advertising and Promotions

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

No person, firm or corporation shall advertise in dry counties, municipalities, or judicial districts of this State for alcoholic beverages by signs, billboards, or displays. Notwithstanding the foregoing, alcoholic beverages may be advertised in the following areas even if located in a dry county: 1. municipalities that meet the definition of “resort” as defined by Miss. Code Ann. Section 67-1- 5(o)(iii); 2. on and immediately outside the premises of any permittee within a resort area as defined by Miss. Code Ann. Section 67-1-5(o)(iii) if the entire municipality or county is not wet for alcoholic beverages; or 3. in municipalities that have voted to be wet for alcoholic beverages. 101 All alcoholic beverage advertising, and any industry related promotions such as contests and sweepstakes shall adhere to applicable statutes and rules. A retailer and its employees may not participate in a contest or sweepstakes in any way. For example, the contest or sweepstakes may not mention a specific retailer, the retailer cannot offer point of sale materials advertising the contest or sweepstakes, the drawing may not be held on a retail premises and the prize(s) may not be given away on a retail premises. 102 For purposes of this regulation, a contest or sweepstake shall not include any giveaways that require the purchase of chances to win or purchase of an item for a chance to enter. Such giveaways could be considered an illegal raffle and result in disciplinary action.

35.II.2.02 revised effective June 2, 2022

Chapter 3 Permitted Premises Where Alcoholic Beverages Are Sold

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

The minimum distances provided in Miss. Code Ann. Section 67-1-51(3), shall be measured from the nearest point of the building housing the church, school, kindergarten or funeral home to the nearest point of the premises which consist of the floor planned area to be licensed by the Commissioner. This distance shall be measured in a straight line, such as air line distance, rather than the usual route of pedestrian travel.

35 Miss. Admin. Code Pt. 2, R. 101 Rule 101

No person shall sell or offer for sale any alcoholic beverages within four hundred (400) feet of any church, school, kindergarten, or funeral home, provided, however, within an area in which both the premises and the church, school, kindergarten, or funeral home are zoned commercial or industrial such minimum distance shall not be less than one hundred (100) feet.

35 Miss. Admin. Code Pt. 2, R. 102 Rule 102

In instances in which a church, school, kindergarten or funeral home is located in a residential district and the place of sale of any alcoholic beverages shall be located in an adjacent

commercial or industrial district, such minimum distance between the place of sale of the alcoholic beverages and the church, school, kindergarten or funeral home shall be four hundred (400) feet.

35 Miss. Admin. Code Pt. 2, R. 103 Rule 103

Effective June 1, 1996, any location at which any alcoholic beverages are lawfully being presently offered for sale which does not conform to the above mentioned provisions shall be permitted to continue such sales, until such time as the business is abandoned for a six-month period.

35 Miss. Admin. Code Pt. 2, R. 104 Rule 104

A church or funeral home may waive the distance restrictions in favor of allowing issuance by the Commissioner of a permit authorizing the sale of alcoholic beverages that would otherwise be prohibited under the minimum distance requirements. Such waiver shall be in written form from the owner, the governing body, or the appropriate officer of the church or funeral home having the authority to execute such a waiver and the waiver shall be filed with and verified by the Commissioner before becoming effective.

35 Miss. Admin. Code Pt. 2, R. 105 Rule 105

A door must be located at or near the front of every place of business selling packaged alcoholic beverages. The back door to such place of business or storage area must be kept locked at all times except when merchandise is being received. In cases of orders or ordinances of a governing authority forbidding the locking of a back door because of a fire hazard, the Commissioner will make exceptions to this rule.

35 Miss. Admin. Code Pt. 2, R. 106 Rule 106

Surplus stock must be stored in the same building where the retail business is conducted, but nothing shall prohibit the owner or manager of such a place of business from erecting a partition between the retail and the storage area thereof. In the event that a permittee has multiple permits for a business establishment and there is controlled access to all areas of the establishment, the permittee may use a common storage facility located and identified on the floor planned area for all alcoholic beverages purchased.

35 Miss. Admin. Code Pt. 2, R. 107 Rule 107

A permittee utilizing a common storage facility for a business establishment with multiple permits must submit a floor plan of the common storage facility that designates where alcoholic beverages purchased under each permit will be stored. Co-mingling of the permitted inventories by the multiple permittee shall result in the suspension or revocation of the permits.

35 Miss. Admin. Code Pt. 2, R. 108 Rule 108

Except as stated herein, all sales of alcoholic beverages shall be made inside the permitted premises. If the Governor of the State of Mississippi has declared a State of Emergency or the Commissioner otherwise determines it is in the best interest of the State to do so, permitted sales for package retailers may include orders and payment through the telephone or electronically through the internet, with curbside pickup for customers in the parking lot of the package retailers. The Department will issue a public announcement if curbside service is authorized.

35 Miss. Admin. Code Pt. 2, R. 109 Rule 109

Under very limited circumstances, a permittee may request a waiver from the Chief of Enforcement to authorize the storage of surplus alcoholic beverages in a location that is separate from the building where the retail business is being conducted. Any off-site storage exception or waiver request must be approved by the Chief of Enforcement. A request for a waiver must meet the following requirements: 1. The permittee must demonstrate that the additional storage is required as the result of an unforeseen circumstance and is temporary in nature.

The off-site storage location must meet all distance requirements of Miss. Code Ann. Section 67-1-51 in the same manner as the retail premises as well as all local ordinances pertaining to zoning. Further, the proximity of the off-site storage location to the permittee's retail premises shall be considered by the Department. However, the off-site location shall not be considered part of licensed premises for purposes of the sale of alcoholic beverages. The site may only be used for the safe and secure storage of alcoholic beverages. 3. All entrances and any other access to the storage facility must remain secure and locked at all times, except when merchandise is being received or transferred to the retail location. The Chief of Enforcement may request a floor plan of the off-site location as well as a copy of the permittee's deed or lease to ensure that permittee can accomplish restricted access to the off- site location. The location is subject to inspection by ABC. 4. The exclusive use of the off-premises location must be storage of surplus alcoholic beverage inventory and items authorized for sale by Miss. Admin. Code Title 35.II.2.23. There shall be no other use of the off-site storage location. 5. A permittee utilizing an off-site storage location for a business establishment with multiple permits must submit a floor plan of the facility that designates where alcoholic beverages purchased under each permit will be stored at the off-premises location. Co-mingling of the permitted inventories by a multiple permittee shall result in the suspension or revocation of the permits.

35 Miss. Admin. Code Pt. 2, R. 110 Rule 110

In addition to the above, the Chief of Enforcement may request any other documentation from the permittee deemed relevant for consideration of a waiver request to ensure compliance with all ABC laws and regulations. On a case-by-case basis, any waiver granted pursuant to this regulation may be subject to special conditions imposed by the Department. The Department may revoke a waiver for an off-site storage location at any time. The permittee will be notified of the revocation in writing.

35 Miss. Admin. Code Pt. 2, R. 111 Rule 111

On-premises permits may be issued to qualified hotels, restaurants, clubs, and to common carriers with adequate facilities for serving passengers. In resort areas, in addition to those types of businesses listed in the preceding sentence, on-premises permits may be issued to businesses that operate solely as bars or permitted casinos or as otherwise authorized by statute.

35 Miss. Admin. Code Pt. 2, R. 112 (Reserved)

35 Miss. Admin. Code Pt. 2, R. 200 Restaurants

35 Miss. Admin. Code Pt. 2, R. 201 Rule 201

To qualify as a “restaurant” under Miss. Code Ann. Section 67-1-5(m), the premises must have and maintain the following minimum kitchen requirements. All equipment must meet applicable standards as required by the Mississippi State Department of Health and as listed in the FDA Food Code. Menus must be readily available and visible to customers along with the dining hours of operation. Dining hours must be adequate to meet the requirements based on the business's individual food service plan. 1. A menu that contains at least five (5) separate entrees. Food items must be prepared in whole or in part on the premises. Food items that are merely heated and served or “ready-to-eat” without further preparation do not meet this requirement. Specialty or theme restaurants that

specialize in one entrée line may be exempted from this requirement so long as the entree line contains an acceptable number of theme or specialty entrée variations. 2. At a minimum, a Risk Category 2 Permit issued by the Mississippi State Department of Health. Proof of the Permit is required for the initial application and all subsequent renewals. 3. Employ at least one (1) employee with management or supervisory responsibility certified as a “food manager”, or an equivalent position, by an educational program recognized by the Mississippi Department of Health. 4. A kitchen that contains the following functional equipment: a. Oven and stove top (can be one complete unit); b. Cold storage areas (i.e., a refrigerator and freezer, either separate or combined); c. Ventilation hood that meets applicable requirements under Mississippi State Department of Health regulations and city and/or local ordinances; d. Adequate food preparation areas and countertop space; e. Mop sink; f. Three-compartment sink; and g. Separate hand-washing facilities for employees.

35 Miss. Admin. Code Pt. 2, R. 202 Rule 202

At least 25% of the revenue a restaurant permittee receives must be derived from the preparation, cooking and serving of meals or, if food is given to and consumed by customers at no charge, the value of the food must be equal to 25% or more of total revenue.

35 Miss. Admin. Code Pt. 2, R. 203 Rule 203

“Meals” shall mean food and non-alcoholic drinks. It shall not include alcoholic beverages, beer or light wine and non-alcoholic beverages used in the preparation of mixed alcoholic drinks.

35 Miss. Admin. Code Pt. 2, R. 204 Rule 204

Restaurants may meet the 25% requirement using one of two options. Permit holders may not combine the below options, and must maintain either option exclusively for the permit year for purposes of determining whether 25% requirements are met. 1. If the permittee chooses to meet the 25% requirement through the sale of meals, the amount of funds derived from the sale of meals prior to any accounting adjustments by the permit holder must be 25% or more of total gross revenue when compared to gross revenue derived from the sale of food and beverages. The permittee shall calculate this figure by adding the gross revenue derived from the sale of beer, light wine, alcoholic beverages and meals and then determine the percentage amount from this total figure that is derived from the sale of meals as defined above. 2. If the permittee chooses to meet the 25% requirement through the giving away of food for consumption by customers, the value of the food must be equal to or more than 25% of total gross revenue derived from the total sale of food and beverages. “Value of food” is the cost of the food and non-alcoholic drinks purchased and given in a complimentary manner to customers, plus a reasonable mark-up not to exceed 300%. Such cost shall not include non- alcoholic beverages used in the preparation of mixed alcoholic drinks. The permittee should calculate this figure by adding the gross revenue derived from the sale of beer, light wine and alcoholic beverages to the value of food given to customers in a complimentary manner. The permittee should then determine the percentage amount of this figure that is derived from the sale of food.

35 Miss. Admin. Code Pt. 2, R. 205 (Reserved)

35.II.02.03 Revised effective November 15, 2023

Chapter 04 Hours and Days During Which Alcoholic Beverages May Be Sold by On-Premises Permittees, Package Stores and Caterers

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

On-premises permittees and caterers may make sales of alcoholic beverages at the permitted location between the hours of 10:00 a.m. and midnight, Monday through Saturday. No sales or deliveries of alcoholic beverages shall be made to any person on Sundays unless hours have been extended as described below.

35 Miss. Admin. Code Pt. 2, R. 101 Rule 101

On New Year's Eve, on-premises permittees and caterers may be allowed to remain open until 1:00 a.m., January 1st. In the event that New Year's Eve falls on Sunday, on-premises permittees and caterers may make sales of alcoholic beverages at the permitted location between the hours of 1:00 p.m. and 1:00 a.m. In the event that a municipality or county prefers not to recognize the extension of hours on New Year's Eve, the municipality or county shall notify the Chief of Enforcement, in writing, no later than September 1st of that year.

35 Miss. Admin. Code Pt. 2, R. 102 Rule 102

The governing authority of any municipality or county, usually the Board of Alderman or Board of Supervisors, may petition the Department to shorten or extend the hours of sale and/or consumption of alcoholic beverages by on-premises permittees and caterers located in the municipality or county. The petition must be accompanied by a certified copy of the order of the municipal or county governing authority requesting the change in hours. Regardless of the date of request, any change in hours will not be effective until approved by the Department. Unless otherwise designated by the Department, the hours for sale and consumption shall be the same.

35 Miss. Admin. Code Pt. 2, R. 103 Rule 103

Resort areas are exempt from the above provisions requiring the sale of alcoholic beverages to be between the hours of 10:00 a.m. and midnight. However, the governing authority of any municipality or county may petition the Department to designate the hours of sale and/or consumption of alcoholic beverages for resort area on-premises permittees or caterers. All petitions must be accompanied by a certified copy of the resolution of the municipal or county governing authority requesting the setting of hours. Upon receipt of the petition, or upon its own discretion, the Department shall set whatever hours of sale and/or consumption it deems appropriate for any particular resort area. Additionally, governing authorities within resort areas may set hours for sale by ordinance if authorized to do so under Miss. Code Section 67-1- 5(o)(iii). Governing authorities should forward a copy of any such ordinance to ABC upon passage. Unless otherwise designated by the Department, the hours for sale and consumption shall be the same.

35 Miss. Admin. Code Pt. 2, R. 104 Rule 104

It shall be unlawful for any holder of a package retailer's permit or any employee or agent thereof, to sell, give away, deliver or barter any alcoholic beverages before 10:00 a.m. and after 10:00 p.m., or on any Sunday, or on Christmas Day.

35 Miss. Admin. Code Pt. 2, R. 105 (Reserved)

35.II.2.04 revised effective July 28, 2021

Chapter 05 Purchase and Sale of Distilled Alcoholic Beverages by On-Premises Permittees

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

All sales of alcoholic beverages by on-premises permitted places of business shall be made by the drink, EXCEPT 1. Bottles of distilled alcoholic beverages may be sold as follows: a. At such businesses being operated in connection with hotels and motels which may sell such beverages in bottles for delivery to and consumption in rooms of registered guests; and b. On-premises retailer clubs may sell exclusively to its members such beverages in bottles for delivery and consumption only upon the club's permitted premises. Each bottle must clearly reflect the club member's name that purchases the bottle. 2. Wine and champagne may be sold by any on-premises permittee by the bottle for consumption exclusively in the permitted place. 3. A patron may remove one bottle of wine from the permitted premises into a wet area when: a. The patron consumed a portion of the bottle of wine in the course of a meal purchased on the licensed premises; b. The permittee securely reseals the bottle; c. The bottle is placed in a bag that is secured in a way as to be visibly apparent when the bag is opened; and d. A dated receipt for the purchase of the wine and meal is available.

35 Miss. Admin. Code Pt. 2, R. 101 Rule 101

All sales of alcoholic beverages by on-premises permittees shall be for consumption in the licensed premises only, unless otherwise expressly authorized by law or regulation. The licensed premises shall consist of the area designated in the floor plan. In the event that a permittee has multiple permits for a business establishment and there is controlled access to all areas of the establishment, the permittee may submit an all-inclusive floor plan of the entire enclosed area. The Department shall have the discretion to allow the consumption of alcoholic beverages throughout the permitted area regardless of where on the premises the beverages are purchased as long as the Department is satisfied that the permittee is the actual owner of the entire premises and that there is sufficient controlled access to the premises.

35 Miss. Admin. Code Pt. 2, R. 102 Rule 102

An on-premises permittee may request to temporarily increase or decrease the area designated in its floor plan as its licensed premises by filing a written request with the Chief of Enforcement at least 10 days prior to the desired temporary change. Regardless of whether the area is decreased or increased, the on-premises permittee will remain responsible for maintaining all ABC requirements on its temporarily decreased or increased premises. For a proposed increase, the request must clearly show the boundaries of the newly expanded floor plan. For a proposed decrease, the request must clearly show the portion of the existing floor plan that will temporarily no longer be under the on-premises permittee’s control and state the duration of the temporary decrease. A temporary decrease in a premises will only be granted if done to allow an unaffiliated holder of a Class I temporary permit to sell and distribute alcoholic beverages within the portion of the area temporarily no longer under the on-premises permittee’s control. For both a decrease and an increase, the request must state the dates that the requested decrease or increase will be in effect.

35 Miss. Admin. Code Pt. 2, R. 103 Rule 103

A permittee must maintain sufficient control over its premises to prohibit patrons from entering or leaving the permitted premises with alcoholic beverages except as authorized by law or regulation. In instances where a fence, rope, barrier or gate is used to prohibit exit or entrance

onto the premises, such fence, rope, barrier, or gate must be a height of at least three (3) feet from the ground.

35 Miss. Admin. Code Pt. 2, R. 104 Rule 104

If the permitted premises is located within a Leisure Recreation District, the on-premises permittee may allow patrons to leave its premises with alcoholic beverages as provided by applicable statutes dealing with Leisure Recreation Districts. Further, an on-premises permittee may allow its patrons to remove a bottle of wine into a wet area from its permitted premises as provided by Section 100 above.

35 Miss. Admin. Code Pt. 2, R. 105 Rule 105

No on-premises permittee shall sell or allow consumption of alcoholic beverages inside the premises where the business is conducted, such as the lounge, bar or restaurant except during hours when alcoholic beverages may be legally sold and/or consumed, as set forth in Title 35, Part II, Subpart 02 Chapter 4 of the Mississippi Administrative Code. However, alcoholic beverages may be consumed during other hours at a permittee sponsored Christmas party for his employees or on Sunday after 1:00 p.m., in a privately leased banquet room of a permittee with prior written approval from the Department. An application, in writing, stating the date, beginning and ending time of the event, the number of employees (or persons, when applicable) anticipated to attend, and a copy of the lease agreement (when applicable) must be submitted to the Chief of Enforcement by the permittee two weeks prior to the Christmas party or lease agreement. Christmas parties are restricted to permittee, employees and their guest. No requests will be approved unless the permittee is in compliance with all rules and regulations of the Department.

35 Miss. Admin. Code Pt. 2, R. 106 Rule 106

No on-premises permittee shall allow alcoholic beverages to be brown-bagged by a consumer/customer on the permitted premises. However, this restriction does not apply to privately leased banquet rooms or privately leased hospitality suites. If a private banquet room or hospitality suite is leased to an individual and said individual desires to bring his own alcoholic beverages (brown-bagging), the permittee is strictly prohibited from providing or serving alcoholic beverage inside the lease area. On Sundays, when the Department specifically authorizes consumption as described above, a consumer may ONLY brown-bag alcoholic beverages previously obtained from a package retailer in the State. All alcoholic beverages remaining in a leased banquet room or hospitality suite after the expiration of the lease shall be destroyed by the permittee.

35 Miss. Admin. Code Pt. 2, R. 107 Rule 107

On-premises permittees operating a hotel or motel that elect to place mini bars in the rooms of registered guests are held responsible for keeping the mini bars locked with the issuance of keys restricted to guests who present a valid identification card verifying that he or she is over 21 years of age.

35 Miss. Admin. Code Pt. 2, R. 108 Rule 108

No permittee may refill any alcoholic beverage container with an alcoholic beverage.

35 Miss. Admin. Code Pt. 2, R. 109 Rule 109

When a patron requests a specific brand of alcoholic beverage, no permittee may dispense an alternate brand of alcoholic beverage without first notifying the customer that the requested brand is not available.

35 Miss. Admin. Code Pt. 2, R. 110 (Reserved)

35.II.2.05 revised effective January 12, 2022

Chapter 06 Retailers Records

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

It is the duty of every retailer of alcoholic beverages to keep and preserve for a period of three (3) years adequate records of the sales of the business. This includes sales of food, beer, and alcoholic beverages, as well as any other items sold, admission fees, cover charges, and any other revenue. Restaurants shall keep records of sales in four (4) separate categories: food, beer, alcoholic beverages, and all other sales.

35 Miss. Admin. Code Pt. 2, R. 101 Rule 101

The retailer shall also keep itemized invoices for all merchandise purchased (and whether procured from local or other retail or wholesale outlets), all bank statements and cancelled checks, and all other books or accounts as may be necessary to determine the financial position of the business. All itemized purchase invoices and tickets shall bear the items purchased, date of purchase, name of the seller and purchaser. Cash register tapes may not be used in lieu of itemized invoices for record purposes.

35 Miss. Admin. Code Pt. 2, R. 102 Rule 102

All required records shall be adequate in substance to conform with generally accepted accounting practices and all records shall be written in the English language. All records shall be open for examination at any time by the Department.

35 Miss. Admin. Code Pt. 2, R. 103 Rule 103

The records provided for in this regulation and applicable Federal regulations shall be kept at the retailer’s place of business or at the office of his attorney or accountant within this State. Failure to keep and allow examination of such records shall subject the permittee to immediate revocation of its alcoholic beverage permit.

35 Miss. Admin. Code Pt. 2, R. 104 Rule 104

Restaurants located within a Qualified Resort Area are exempt from the food sale requirement as provided by Miss. Code Ann. 67-1-5 but must maintain itemized records as any other restaurant permittee.

35 Miss. Admin. Code Pt. 2, R. 105 (Reserved)

35.II.2.06 revised effective December 1, 2018

Chapter 07 Prohibited Conduct and Activities

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

No person holding an alcoholic beverage on-premises permit, and no agent, associate, employee, representative, promoter, entertainer or servant of any such permittee shall do, permit, or fail to stop any of the following activities or events on or about the licensed premises: 1. Fraternize by sitting at tables with customers while on duty; or to employ or pay persons to solicit patrons for drinks, to accept drinks from patrons and receive a commission or any other remuneration in any other way. 2. Permit any prostitute to frequent the licensed premises, or to solicit patrons for prostitution. 3. Permit any person to remain on the premises while such person is unclothed or in such attire, costume or clothing to expose to view any portion of the female breast below the top of the areola or any portion of the pubic hair, the pubic hair area, anus, cleft of the buttocks, vulva, penis or genitals. Furthermore, no female permittee or any female agent, associate, employee, representative, promoter, servant, or entertainer of said permittee shall wear such attire,

costume or clothing on the licensed premises which reveals any part of the female breast below the top of the areola. 4. Encourage or permit any person, for entertainment purposes, to touch, caress or fondle the breast, buttocks, anus, penis or genitals of their own, or those of any person, animal or inanimate object. 5. Permit any person to wear or use any device or covering, exposed to view, which simulates the breast, buttocks, anus, penis or genitals of their own, or those of any person, animal or inanimate object. 6. Permit live entertainment or conduct which is lewd, immoral or offensive to public decency, including: a. Any live act or performance of, or which simulates: i. Sexual intercourse, masturbation, sodomy, bestiality, or oral copulation, flagellation or any sexual act prohibited by law. ii. The touching, caressing or fondling of the breast, buttocks, anus, penis or genitals. iii. The displaying of the pubic hair, the pubic hair area, anus, vulva, penis, genitals or any portion of the female breast below the top of the areola. iv. The use of any artificial device or object to depict any of the prohibited activities described above. b. Any live act or performance which appeals primarily to sexually oriented, lustful, prurient, or erotic interest including, but not limited to, the following: erotic dancers; male or female strippers; topless female dancers; contests or exhibitions such as wet t-shirt, biggest breast, biggest bulge, body beautiful, best leg, hairiest chest, best tan, best hiney, mud wrestling, tight jeans, and contests or exhibitions involving the use of lingerie or similar attire. This prohibition shall not apply to contests and exhibitions involving the use of swim wear that (1) do not otherwise violate the regulations included herein; and (2) have been pre- approved in writing by the Commissioner or his delegatee on a per-event basis. Failure to obtain such preapproval may result in suspension or revocation of the permit. 7. The showing of films, still pictures, electronic reproduction, or other visual reproductions depicting: a. Acts, or simulated acts, or sexual intercourse, masturbation, sodomy, bestiality, oral copulation, flagellation, or any other sexual acts which are prohibited by law. b. Any person being touched, caressed or fondled on the breast, buttocks, anus, penis or pubic area. c. Scenes wherein a person displays the vulva, anus, penis or genitals or pubic area. d. Scenes wherein artificial devices or inanimate objects are employed to depict, or drawings are employed to portray, any of the prohibited activities described above. e. Paragraph 7 shall not apply to any theatrical performance which, when considered as a whole and in the context that it is used, expresses matters of serious literary, artistic, scientific or political value and is: i. Held at a theater, concert hall, art center, or museum, and is held out to the public as predominately offering and which does predominately offer such performances; ii. Does not violate any other portion of Miss. Admin. Code Title 35, Part II, Subpart 2; and iii. Is not in violation of federal law regarding pornography, indecency or obscenity. 8. Allow disorderly or boisterous conduct or the use of profane or vulgar language; provided this regulation shall not apply to remarks made by entertainers/entertainment groups in the course

of their performance unless otherwise prohibited by the laws of the State of Mississippi, and as long as: a. The performance takes place in a portion of the licensed premises which has a sign conspicuously posted at each entrance, advising the public choosing to enter the portion of the premises of the nature of the performance and that certain words or phrases used may be considered offensive or insulting by some persons, and b. That any use of profane language, addressed in paragraph (8) above, is not so amplified as to be clearly and distinctly audible in other areas of the licensed premises or beyond the premises. 9. On-premises permitted places of business may charge an admission fee, a cover or minimum charge, or an entertainment fee, but shall not require the purchase of alcoholic beverages in order for a customer to enter or remain in such permitted place.

35 Miss. Admin. Code Pt. 2, R. 101 Rule 101

The permittee shall be responsible at all times for any and all of the aforesaid actions which may take place in any permitted establishment whether the permittee or their manager is present or not. The Department may revoke or suspend the license of any permittee for the violation of any of the provisions of this chapter. Any questions regarding the permissibility of activities or conduct governed by this regulation should be submitted, in writing, to the Chief of Enforcement prior to the activities or conduct occurring.

35 Miss. Admin. Code Pt. 2, R. 102 Rule 102

Permittees shall be accountable for any criminal or regulatory employee misconduct which occurs on any part of the licensed premises whether the permittee or their manager is present or not. Such misconduct may result in suspension or revocation of the permit.

35 Miss. Admin. Code Pt. 2, R. 103 Rule 103

Permittees shall be accountable for any criminal or regulatory non-employee misconduct when the Department finds that the permittee or the permittee’s employees knew or should have known about the non-employee misconduct and allowed, permitted or suffered the misconduct to occur or continue. . Such misconduct may result in suspension or revocation of the permit.

35 Miss. Admin. Code Pt. 2, R. 104 Rule 104

If a permittee or a permittee’s clerk, agent or employee is convicted of selling alcoholic beverages to a minor, the subject permit shall be suspended or revoked based on the schedule of disciplinary actions under Miss. Code Section 67-1-81(1)(b).

35 Miss. Admin. Code Pt. 2, R. 105 (Reserved)

35.II.2.07 revised effective March 8, 2021

Chapter 08 Employment of Persons Under Age 21

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

A package retailer permittee may employ any person under the age of twenty-one (21) years to unload alcoholic beverages while the product is in sealed cartons, boxes, or similar sealed shipping packages. However, a package retailer permittee may not employ any person under the age of twenty-one (21) years to otherwise sell or handle alcoholic beverages.

35 Miss. Admin. Code Pt. 2, R. 101 Rule 101

An on-premises permittee may employ a person who is at least eighteen (18) years of age to take orders for or deliver orders of alcoholic beverages while waiting on tables. This activity shall not be deemed to constitute an unlawful possession or furnishing of alcoholic beverages if such activities are in the scope of his or her employment by the on-premises permittee. This exception

shall not authorize a person under the age of twenty-one (21) to tend bar or act in the capacity as a bartender. This regulation is not intended to prohibit a person under twenty-one (21) from working as an entertainer.

35 Miss. Admin. Code Pt. 2, R. 102 (Reserved)

35.II.2.08 revised effective March 15, 2019

Chapter 09 Cooking Wines

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

All wines containing more than five percent (5%) alcohol by weight are considered an alcoholic beverage and shall be possessed, transported, sold, purchased, etc., in accordance with and under the provisions of the Local Option law. Notwithstanding the foregoing, salted wines that contain twenty-one percent (21%) alcohol by volume or less and 1.5 grams of salt per 100 cubic centimeters or more are not considered capable of being consumed as a beverage by a human being. Therefore, such salted wines, commonly referred to as, “cooking wines” are exempt from the provisions of the Local Option law.

35 Miss. Admin. Code Pt. 2, R. 101 (Reserved)

35.II.2.09 revised effective March 15, 2019

Chapter 10 Restriction on Interests of Division Employees

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

No officer, agent or employee assigned to the Division shall hold any interest in any business engaged in the manufacture, distillation, importation, rectifying, or selling of alcoholic beverages; nor shall such person receive any compensation or profit from such business.

35 Miss. Admin. Code Pt. 2, R. 101 (Reserved)

35.II.2.10 revised effective March 15, 2019

Chapter 11 Manufacturer’s Representative

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

A manufacturer's representative, who shall be the manufacturer's control state manager or an executive officer of the company, shall be recognized by the Division only after proper application for registration has been made by the manufacturer and approved. In either case, the individual designated as a manufacturer's representative and approved to do business with the Division must be a full time employee of the manufacturer.

35 Miss. Admin. Code Pt. 2, R. 101 Rule 101

The manufacturer's registered representative may authorize persons to work for the manufacturer within this state; each of whom must be registered with the Division. As employees are added or replaced it will be the responsibility of the manufacturer to register or have deleted the names of such employees with the Division. Such employees may represent more than one manufacturer.

35 Miss. Admin. Code Pt. 2, R. 102 Rule 102

The manufacturer shall be held responsible for all activities, including the personal conduct, of all employees of the manufacturer in connection with the representation of their business in this state. Every employee or representative of a manufacturer shall observe state laws and the rules and regulations of the Division.

35 Miss. Admin. Code Pt. 2, R. 103 Rule 103

A manufacturer’s registered representative may not distribute alcoholic beverages unless specifically authorized within these regulations. Representatives are prohibited from pouring alcoholic beverages at sponsored events, regardless of whether the manufacturer is a sponsor of the event. Representatives are authorized to pour alcoholic beverages at trade shows hosted by the manufacturer.

35 Miss. Admin. Code Pt. 2, R. 104 Rule 104

A manufacturer’s registered representative has a duty to report any unlawful activity which violates Local Option Laws or regulations seen on a permitted premises to the Division.

35 Miss. Admin. Code Pt. 2, R. 105 Rule 105

The registration of a manufacturer's representative and his employees may be suspended and the manufacturer's products may be delisted by the Division and/or a civil penalty not to exceed $1,000.00 may be imposed at the direction of the Department if it shall appear to the satisfaction of the Department that the law or the policies and/or regulations of the Division have been violated by the manufacturer, the manufacturer's registered representative, or any employee of the manufacturer working in the state.

35 Miss. Admin. Code Pt. 2, R. 106 Rule 106

This regulation does not affect the manufacturer's employment of legal counsel regularly engaged in the practice of law in matters concerning the application and interpretation of law. Further, this regulation does not apply to manufacturer's representatives in instances where the Division solicits special orders only for its product inventory.

35 Miss. Admin. Code Pt. 2, R. 107 Rule 107

A distiller's, distributor's, rectifier's, or importer's representative or employee shall be recognized under the same conditions established in this regulation for a manufacturer's representative.

35 Miss. Admin. Code Pt. 2, R. 108 (Reserved)

35.II.2.11 revised effective May 1, 2019

Chapter 12 Tied House, Gifts, Gratuities, and Inducements

35 Miss. Admin. Code Pt. 2, R. 100 Definitions

35 Miss. Admin. Code Pt. 2, R. 101 Rule 101

“Advertising specialties” are items that are designed to be carried away by consumers, such as bottle or can openers, cork screws, shopping bags, matches, printed recipes, pamphlets, leaflets, pens, shirts, caps and visors. The Holder may not directly or indirectly pay or credit the retailer for using or distributing these materials or for any expense incidental to their use.

35 Miss. Admin. Code Pt. 2, R. 102 Rule 102

“Holder” refers to holders of manufacturer's or wholesaler’s permits, or anyone connected with the business of such holder, or any other distiller, rectifier, blender or bottler of alcoholic beverages.

35 Miss. Admin. Code Pt. 2, R. 103 Rule 103

“Loyalty cards, discount cards, or membership cards” means a card that is issued by a retail permittee to customers that, upon presentation to the retail permittee, provides for the purchaser

to receive a loyalty card, discount card, membership card, or coupon discount on a portion of the amount paid by the purchaser for purchases of alcoholic beverages at the time of sale.

35 Miss. Admin. Code Pt. 2, R. 104 Rule 104

“Nominal Value” shall be based on a per brand basis and shall mean the industry's purchase price or a reasonable wholesale value not to exceed the dollar limitations placed on said or like items pursuant to the Federal Tied House Regulations and adjustments made by the Director of the Alcohol and Tobacco Tax and Trade Bureau.

35 Miss. Admin. Code Pt. 2, R. 105 Rule 105

“Point of sale advertising materials” are items designed to be used within a retail establishment to attract consumer attention to the product of the Holder. Such items include, but are not limited to: posters, placards, designs, inside signs (electric, mechanical or otherwise), window decorations, trays, coasters, mats, menu cards, paper napkins, foam scrapers, back bar mats, thermometers, clocks, calendars and alcoholic beverage lists or menus. The Holder may not directly or indirectly pay or credit the retailer for using or distributing these materials or for any expense incidental to their use.

35 Miss. Admin. Code Pt. 2, R. 106 Rule 106

“Product displays” means any wine racks, bins, barrels, casks, shelving, or similar items the primary function of which is to hold and display consumer products.

35 Miss. Admin. Code Pt. 2, R. 107 (Reserved)

35 Miss. Admin. Code Pt. 2, R. 200 Rule 200

Pursuant to Miss. Code Ann. Section 67-1-77(2), no Holder shall make an offer of gifts, gratuities, or inducements of any kind whatsoever to any alcoholic beverage retailer in Mississippi when such gifts or gratuities are in any way connected with or associated with any phase of the purchase, sale, marketing, distribution or control of alcoholic beverages within the State of Mississippi, except as provided below. A Holder may give or sell product displays to alcoholic beverage retailers so long as the total value of all such displays to the retailer does not exceed $300 per brand at any one time in any one retail establishment. The value of the product display is the actual cost to the Holder who initially purchased it. Transportation and installation costs are excluded.

35 Miss. Admin. Code Pt. 2, R. 201 Rule 201

A Holder may furnish the following to an alcoholic beverage retailer: inside signs, educational seminars, product displays, point of sale advertising materials, and advertising specialties, so long as the value of such items do not to exceed the applicable Nominal Value.

35 Miss. Admin. Code Pt. 2, R. 202 Rule 202

A Holder may furnish equipment and/or supplies to an alcoholic beverage retailer so long as such equipment or supplies are sold at a price not less than the cost to the Holder who initially purchased them, and if the price is collected within 30 days of the date of sale.

35 Miss. Admin. Code Pt. 2, R. 203 Rule 203

Educational seminars, trade shows or tasting events for licensed retailers sponsored by any employee or registered agent of any Holder, are permissible at licensed on-premise establishments, establishments holding any temporary permit, or at conventions sponsored by and on behalf of alcoholic beverage retailer associations. All alcoholic beverages consumed at such seminars, trade shows, or tastings, other than approved conventions, must be furnished exclusively by the on-premise permittee on his licensed premises. A Holder's representatives may transport and provide alcoholic beverages for tasting and exhibition at any convention sponsored by an alcoholic retailer association convention as long as the alcoholic beverages were previously purchased from a licensed retailer in this state. Offers of samples of new products that

are not available through a licensed retailer must follow the procedures for samples found in Title 35, Part II, Subpart 2, Chapter 13 of the Mississippi Administrative Code. Consumption of alcoholic beverages at all seminars, trade shows and tasting events is limited to the hours of consumption set forth in Title 35, Part II, Subpart 2, Chapter 4 of the Mississippi Administrative Code.

35 Miss. Admin. Code Pt. 2, R. 204 Rule 204

Any educational seminar, trade show or tasting event given for the general public (where alcoholic beverages are sampled), regardless of who sponsors the program, is limited to licensed on-premise establishments, or an establishment holding a temporary permit, with the permittee exclusively furnishing the alcoholic beverages.

35 Miss. Admin. Code Pt. 2, R. 205 Rule 205

Any person sponsoring an alcoholic beverage seminar or trade show occurring at a location in a wet county not possessing any on premise alcoholic beverage permit or a temporary permit shall not distribute alcoholic beverages for tasting purposes or any other purpose.

35 Miss. Admin. Code Pt. 2, R. 206 Rule 206

The preceding paragraphs do not authorize a manufacturer, distiller, or wholesaler to pay an alcoholic beverage retailer's travel and/or lodging expenses in conjunction with an educational seminar.

35 Miss. Admin. Code Pt. 2, R. 207 Rule 207

Except as stated in these regulations, alcoholic beverage samples, coupons, rebates or other inducements, which require proof of purchase, to anyone, are strictly prohibited.

35 Miss. Admin. Code Pt. 2, R. 208 Rule 208

A Holder or its promotional representative may furnish to off-premises retailers rebates or coupons that are redeemable either via mail or on-line by the Holder. A retailer may not redeem such rebates. The mail-in or on-line rebate must be accompanied by a proof of purchase. The permittee may not accept any rebate or coupon at the point of sale as full or partial payment for any product offered for sale.

35 Miss. Admin. Code Pt. 2, R. 209 Rule 209

A permittee owning an establishment selling alcoholic beverages for off-premises consumptions may use loyalty cards, discount cards or memberships cards in conjunction with its retail establishment.

35 Miss. Admin. Code Pt. 2, R. 210 Rule 210

Permittees may advertise discounts and coupons with the requirement of the use of the permittee's loyalty card, discount card or membership card in the following circumstances: 1. The permittee shall require customers to present a loyalty card, discount card or membership card to receive the advertised loyalty card, discount card or membership card discount when purchasing an alcoholic beverage or approved product sold at the permittee's retail location for off-premises consumption; 2. No loyalty card, discount card or membership card shall be honored for the purchase of alcohol for any individual below the legal age for purchase of alcohol; 3. A loyalty card, discount card or membership card shall not provide a discount exceeding 25 percent of the advertised retail price of the item; and 4. Direct or indirect cooperation shall not occur between a retailer and a holder or holder's representative in either marketing, redemption or funding of coupons, rebates or loyalty card, discount card or membership card discounts.

35 Miss. Admin. Code Pt. 2, R. 211 Rule 211

Nothing in this regulation is intended to prohibit the type of activity permitted by Title 35, Part II, Subpart 2, Chapter 13 (Samples of Alcoholic Beverages); and Subpart 4, Chapter 9 (Dual Packaging) of the Mississippi Administrative Code.

35 Miss. Admin. Code Pt. 2, R. 212 (Reserved)

35.II.2.12 revised effective June 2, 2022

Chapter 13 Samples of Alcoholic Beverages

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

A manufacturer's representative and its employees, as described in Title 35, Part II, Subpart 2, Chapter 11 of the Mississippi Administrative Code, may furnish one sample of a new product to any permitted retailer. This sample may be given to the permittee or to a manager on behalf of the permittee. Distribution of samples may occur only at the permitted business. Samples are to be used for the promotion of that specific product and may not be used as a gift or an inducement to purchase other products.

35 Miss. Admin. Code Pt. 2, R. 101 Rule 101

A sample of an alcoholic beverage is defined as an alcoholic beverage not previously purchased by that permittee. The size limit per item of samples of alcoholic beverages allowed is to be determined by federal guidelines and/or regulations.

35 Miss. Admin. Code Pt. 2, R. 102 Rule 102

Each bottle of product distributed as a sample must be clearly labeled with the word “SAMPLE”.

35 Miss. Admin. Code Pt. 2, R. 103 Rule 103

Products used for sampling may either (1) be delivered to the LDC Warehouse for distribution to the manufacturer's representative or, (2) if used by the representative for an on-premises permittee, may also be purchased by a manufacturer's representative from a package retailer permittee. If option (1) is utilized for sample use, the cases containing sample alcoholic beverages must be marked or stamped on at least two (2) sides of the case in bold letters with the word “SAMPLE” by the manufacturer prior to shipment. A separate bill of lading must accompany each case of sample alcoholic beverages and the word “SAMPLE” must be clearly marked on said bill of lading. Samples delivered pursuant to option (1) must be removed from the LDC Warehouse within 10 working days of receipt. Failure of the manufacturer's representative to remove samples from the LDC Warehouse upon the expiration of the ten (10) days will result in destruction of said products. The Division will not be responsible for any damages occurring while said products are stored in the LDC Warehouse. Regardless of whether distributed by LDC or purchased from a package retailer permittee, the bottle must be marked “Sample” by the manufacturer's representative or its employee before being used for sampling purposes. Any unused product may be taken by the manufacturer's representative to be offered as a sample at another location.

35 Miss. Admin. Code Pt. 2, R. 103.01 Rule 103.01

The manufacturer's representative is responsible for paying all freight costs, excise taxes, mark- up, sales or use taxes, and any other costs assessed on sample products upon receipt of that product from the LDC Warehouse. Distribution of any product on which taxes have not been paid is strictly prohibited.

35 Miss. Admin. Code Pt. 2, R. 103.02 Rule 103.02

New product may be withdrawn for sample use in a limited amount from bailment inventory if approved in writing by the manufacturer. Such written approval shall include a description of the

product to be removed as well as the amount of product which may be removed. Regardless of authorization given by the Manufacturer, the quantity to be removed is subject to limitation by the Director of ABC. This product shall be used as samples by manufacturer representatives only for licensed permittees. Samples shall never be allowed for trade shows. The product shall be labeled as samples as required by Paragraph 103 of this Chapter.

35 Miss. Admin. Code Pt. 2, R. 104 Rule 104

The manufacturer's representative and his employees shall, on or before the fifteenth day of each month, file a report with the Enforcement Section detailing the distribution of sample products for the preceding month. This report must also include the storage location and amount, by brand, of all sample alcoholic beverages held by the manufacturer's representative or his employees pending distribution.

35 Miss. Admin. Code Pt. 2, R. 105 Rule 105

The willful failure to file such reports, the falsification of such reports, or the distribution of product samples inconsistent with the law or with this regulation may result in the suspension of the registration of a manufacturer's representative and his employees. In addition, the Department may delist the manufacturer's products.

35 Miss. Admin. Code Pt. 2, R. 106 Rule 106

A manufacturer's representative, or his employee, may transport sample alcoholic beverages anywhere within the state provided that such person has obtained authorization for transport from the Division. Such products must be stored outside the passenger compartment of a motor vehicle or in an enclosed container.

35 Miss. Admin. Code Pt. 2, R. 107 Rule 107

On-premises retailers, their managers and their employees, may consume sample alcoholic beverages only during legal hours of sale and in an area removed from the general public. The manufacturer's representative must be present during sampling.

35 Miss. Admin. Code Pt. 2, R. 108 Rule 108

An on-premises permittee may assemble other permittees, along with their licensed managers or employees, for purposes of sampling alcoholic beverages. Consumption of sample alcoholic beverages must take place during legal hours of sale and in an area removed from the general public. The manufacturer's representative must be present during sampling. On-duty managers and employees are strictly prohibited from sampling alcoholic beverages.

35 Miss. Admin. Code Pt. 2, R. 109 Rule 109

Package retailers may consume samples of alcoholic beverages on their licensed premises only if all applicable regulatory requirements in the Chapter are met. Any such samples provided by manufacturers or manufacturers' representative for this sampling may not be distributed to, sold to or given away to customers. Only the package retailer permit owner and approved managers may consume sample alcoholic beverages on the premises and only during legal hours in an area removed from the general public. The manufacturer's representative must be present during the sampling. The manufacturer's representative must remove all unconsumed samples but may offer such alcoholic beverages as samples at other permitted locations in compliance with these regulations. On-duty managers and employees are strictly prohibited from sampling alcoholic beverages.

35 Miss. Admin. Code Pt. 2, R. 110 Rule 110

No alcoholic beverage products distributed as samples by manufacturers or manufacturer representatives may be sold, offered for sale, or distributed to any person by any permittee, manager, or employee of the permittee.

35 Miss. Admin. Code Pt. 2, R. 111 Rule 111

A package retailer may conduct tasting events for its customers only if the following criteria are met and maintained: 1. The retailer must obtain written approval from the Department at least two weeks prior to the event; 2. There can be no charge to the customer for attending or taking part in the event; 3. All tasting product must be served and consumed in an area that is cordoned off by barriers clearly separating the event from the point of sale of any alcoholic beverages; 4. No event may last longer than 4 hours and must occur during regular hours of business; 5. No one under 21 years of age may attend or take part in the event and a sign clearly stating this prohibition must be placed at the entrance of the premises; 6. No food may be served at the event; 7. Each serving of wine served at the event shall not exceed 1-1/4 ounces and no more than a cumulative total of 5 ounces of wine may be consumed by a customer at the event; 8. Each serving of distilled spirits served at the event shall not exceed 1/4 ounce and no more than a cumulative total of 1 ounce of distilled spirits may be consumed by a customer at the event; 9. All product used for tasting must be provided by the package retailer from its own inventory and purchased from the ABC Warehouse or another package store permittee licensed as a wholesaler. It cannot be provided by a manufacturer or its representatives; 10. Only the package retailer's employees may serve the alcohol; 11. Tickets may not be sold for the event; 12. The retailer may only hold 1 event in a rolling three month period; and 13. At the end of the event, package retailers must immediately remove all opened alcoholic beverage bottles used during the event from the premises.

35 Miss. Admin. Code Pt. 2, R. 112 Rule 112

If a package retailer holds a tasting event described in Paragraph 111, the permittee must keep an accurate accounting of the various alcoholic beverages and amounts consumed at each event. The permittee must provide a copy of this accounting to the Department within 10 days of completion of each event.

35 Miss. Admin. Code Pt. 2, R. 113 Rule 113

A Class 1 manufacturing permit holder may provide product to patrons for sampling if the following criteria are met and maintained: 1. The product must be manufactured by the distillery retailer at the site at which the product is being offered for sampling; 2. The product may only be offered in conjunction with a structured tour of the distillery, which must include the entire manufacturing and distilling processes and methods used at the distillery; 3. The product must be offered at no cost to the patron; 4. The product may only be ingested on the premises of the distillery; 5. The product may only be offered for sampling between the hours of 8:00 a.m. and 10:00 p.m.; 6. No one under 21 years of age may attend or take part in the event, and a sign clearly stating this prohibition must be placed at the entrance of the premises; 7. Each sample served may not exceed ¼ ounce, and no more than 4 samples of all product may be provided to an individual during a 24 hour period; and 8. The Distillery Retailer must keep an accurate accounting of the various product provided and consumed as samples. This accounting must be kept for at least 3 years and must be made available for review by ABC upon request.

35 Miss. Admin. Code Pt. 2, R. 114 (Reserved)

35.II.2.13 revised effective August 3, 2019 Chapter 14 Distribution

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

No one except the holder of a permit or his authorized agent shall be allowed to purchase or request the shipment of alcoholic beverages by the Division.

35 Miss. Admin. Code Pt. 2, R. 101 (Reserved)

Chapter 15 Manufacturer (Rectifier)

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

No manufacturer’s (rectifier’s) permit shall be issued until satisfactory evidence is furnished that the applicant holds all permits or authorization required by the Federal Government.

35 Miss. Admin. Code Pt. 2, R. 101 Rule 101

Duplicate copies of monthly returns, transcripts, notices or other data, as required by the Federal Government, must be furnished to the Division not later than the 10 th of each month. In addition, manufacturers (rectifiers) shall furnish the Division duplicate copies of the bills of lading covering all shipments of the products of the permittee.

35 Miss. Admin. Code Pt. 2, R. 102 Rule 102

All laws, rules and regulations of the Federal Government, or any subsequent modification thereof, applicable to the manufacture (rectification) of distilled spirits, wines, cordials, liquors, etc., are by reference hereby adopted and promulgated as the rules and regulations of the Division.

35 Miss. Admin. Code Pt. 2, R. 103 (Reserved)

Chapter 16 Qualifications for Agents

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

No person shall be employed as an agent of the Division unless he/she is of sound moral character and has reached the age of 21 years and meets the qualifications as set forth by the Mississippi State Personnel Board. The applicant must have a Bachelor’s degree from an accredited four-year college or university in criminal justice, law enforcement, criminology, police science, police administration or a directly related field. Alternatively, the applicant must have a Bachelor’s degree from an accredited four-year college or university and possess a current State of Mississippi Law Enforcement Professional Certificate. Any agent of the Division is subject to assignment to any location within the State of Mississippi consistent with the mission needs of the agency for alcoholic beverage enforcement.

35 Miss. Admin. Code Pt. 2, R. 101 (Reserved)

Chapter 17 Mutilation of Shipping Labels

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

No permittee or employee of the permittee shall mutilate, destroy or remove shipping labels or other information stamped or otherwise affixed to any case of alcoholic beverages delivered to the permittee from the LDC Warehouse nor shall any permittee or employee of the permittee

allow the purchaser of alcoholic beverages to remove the labels or information while on the permittee’s premises.

35 Miss. Admin. Code Pt. 2, R. 101 Rule 101

Any action described above will be considered a violation of the regulations and will result in fines, suspension or revocation.

35 Miss. Admin. Code Pt. 2, R. 102 (Reserved)

Chapter 18 Regulations Setting Forth the Requirements of Automatic and Electronic Liquor and Wine Dispensing Systems

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

The installation of automatic and electronic dispensing systems by on-premises permittees is authorized, provided that the following requirements are complied with: 1. Such equipment must avoid an in-series hook-up which would permit the contents to flow from bottle to bottle before reaching the dispensing spigot or nozzle. Multiple bottles of alcoholic beverages utilized to supply a single line or tube in an in-series hook- up must be of identical brand and content. 2. Such equipment must dispense from the original containers, as received from the Division. Once the contents flow from the original containers, as received from the Division, into any such equipment, said contents shall not flow from such equipment into any other containers other than those used by said establishment for sale by the drink. 3. The permittee shall maintain records that reflect the brands and quantities of alcoholic beverages used in such systems. 4. The premises, including any places of storage, where the alcoholic beverages are dispensed, shall be subject to inspection by the Division or law enforcement officers during all business hours for the purpose of inspection or for examination of any books and records required to be kept by on-premises permittees. Where any part of such installation is in a locked room or locked cabinet, permittees shall have a key to said room or cabinet available on the premises, and, upon request by any authorized representative of the Division or a law enforcement officer, such permittees or any employee thereof shall open said storage rooms, cabinets, or other places for such inspection during regular business hours. 5. The filing of an application for the use or alteration of such systems is required. No system shall be placed in service until approval is received from the Division. 6. The use or alteration of such equipment without prior approval from the Division shall constitute good and sufficient cause for the suspension or revocation of the permit.

35 Miss. Admin. Code Pt. 2, R. 101 (Reserved)

Chapter 19 Permittees, Employees and/or Agents Shall Not Be Visibly Intoxicated or Under the Influence of Any Alcoholic Beverage, Beer or Light Wine on Permitted Premises; No Consumption for Package Retailers on Permitted Premises; Limited Consumption for On-Premise Permittees Under Specific Circumstances

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

Except as authorized under Title 35, Part II, Subpart 2, Chapter 13 of the Mississippi Administrative Code, no package retailer permittee, nor employee or agent of the permittee, will be permitted on the premises of the permitted place of business pursuant to Miss. Code Ann.

Section 67-1-51 while consuming or while under the influence of an alcoholic beverage, beer or light wine.

35 Miss. Admin. Code Pt. 2, R. 101 Rule 101

No on-premise permittee, nor employee or agent thereof, will be permitted on the premises of the permitted place of business pursuant to Miss. Code Ann. Section 67-1-51 while intoxicated or visibly under the influence of an alcoholic beverage, beer or light wine. In addition, no on- premises permittee, nor employee or agent thereof who is on duty, will be permitted on the premises of the permitted place of business pursuant to Miss. Code Ann. Section 67-1-51 while consuming an alcoholic beverage, beer or light wine. On duty for purposes of this regulation shall mean visibly working or the absence of another approved manager who is visibly working and exercising control over the operation of the permitted place of business. Intoxicated for purposes of this regulation shall mean above the legal limit which is established by the Implied Consent Law found in Miss. Code Ann. Section 63-11-1 et seq.

35 Miss. Admin. Code Pt. 2, R. 102 Rule 102

The Department may revoke or suspend the license of any package or on-premise permittee for the violation of the provisions of this chapter. The failure of any permittee, or employee or agent thereof, to submit to an intoxilyzer or field sobriety test after being charged with being intoxicated, and having been requested to do so by agents of the Division or any other duly authorized law enforcement official of the State of Mississippi, will be deemed prima facie proof that the permittee, or his agent or employee, was intoxicated.

35 Miss. Admin. Code Pt. 2, R. 103 (Reserved)

Chapter 20 Sales of Alcoholic Beverages by Approved Package Retailers to Other Retailers; Shipping of Wine from Wineries to Package Retailers for Sale

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

Pursuant to all Federal requirements and Miss. Code Ann. Section 67-1-41, permittees may purchase alcoholic beverages from a package retailer holding applicable Federal wholesale permits and who have been approved by the Department to make wholesale sales of alcoholic beverages. In order to buy at wholesale from a package retailer, an on-premise retailer must present a permit identification card, which will be issued by the Division.

35 Miss. Admin. Code Pt. 2, R. 101 Rule 101

Any qualified package retailer may apply with the Department for approval to engage in wholesale transactions with permittees. The permittee must meet all federal permit requirements and must maintain all state permit qualifications as set forth in Miss. Code Ann. Section 67-1-57 in order to qualify for approval by the Department. The package retailer's authorization to make wholesale sales may be suspended or revoked for any violation of the Local Option laws, or the rules and regulations.

35 Miss. Admin. Code Pt. 2, R. 102 Rule 102

Each package retailer authorized to sell at wholesale shall use invoices provided by the Division for sales to other permittees and shall maintain copies of said invoices for a period of three years. Each sales invoice must reflect all requested information at the time of delivery to the purchaser.

35 Miss. Admin. Code Pt. 2, R. 103 Rule 103

Purchases made from authorized package retailers must be completed between the hours of 10:00 a.m. and 10:00 p.m., Monday through Saturday, provided such sales are not otherwise prohibited. New permit holders must make their initial order of alcoholic beverages with the Alcoholic Beverage Control before making a purchase from an approved wholesaler.

35 Miss. Admin. Code Pt. 2, R. 104 Rule 104

An authorized wholesale package retailer may deliver product to permittees between the hours of 10:00 a.m. and 10:00 p.m., Monday through Saturday, provided such sales are not otherwise prohibited. Product must be delivered in a concealed cargo area of a vehicle or sufficiently covered so as to not be visible by the public.

35 Miss. Admin. Code Pt. 2, R. 105 Rule 105

Upon completion of the wholesale transaction or upon delivery of product to the purchaser, the seller must provide a copy of the sales invoice to the purchaser, and the invoice must remain with the seller or purchaser while transporting the purchased beverages to the purchaser's permitted location. The purchaser's copy of the sales invoice shall be maintained by the purchaser at his place of business for a period of three (3) years and, upon request, must be immediately provided to the Division or other law enforcement agency requesting same.

35 Miss. Admin. Code Pt. 2, R. 106 Rule 106

A package retailer authorized to make said wholesale sales shall electronically file a form with the Division showing the on-premises sales for each given month. This information must be filed electronically by the 20th day of the month following the sale. Information reflecting wholesale sales made to other package retailers shall not be included on the form. The seller shall maintain a copy of all sales transactions (on premises and package retailers) for a period of three (3) years. Upon request of the Division or other law enforcement agency, the retailer shall immediately produce said sales invoice to the requesting agency.

35 Miss. Admin. Code Pt. 2, R. 107 Rule 107

All purchases made by on premise permittees under this regulation shall be included in the calculation of the additional privilege fee levied pursuant to Miss. Code Ann. Section 27-71-5. For purposes of calculating the additional privilege fee, the price shall not be less than the price of the alcoholic beverages as listed in the Division's price book in effect at the time of the sale.

35 Miss. Admin. Code Pt. 2, R. 108 Rule 108

Transaction reports submitted to the Division shall be in a standard reporting format unless prior approval for business generated forms is given. Permittees that hold a wholesale permit and make no sales during the preceding period must file a report indicating no sales for that period.

35 Miss. Admin. Code Pt. 2, R. 109 Rule 109

A package retail permittee may receive wine from a winery under the procedure outlined in and for the purposes stated in Miss. Code Section 67-1-41.

35.II.2.20 revised effective March 8, 2021

Chapter 21 Governmental Affairs Representatives

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

A holder of a manufacturer’s or wholesaler’s permit may contract for the service of a representative in the area of governmental affairs on a part-time basis with a holder of an on premises retailer’s permit.

35 Miss. Admin. Code Pt. 2, R. 101 Rule 101

Notice must be provided to the Division by providing a copy of the employment contract entered into by the manufacturer or wholesaler and the representative. The contract shall include a description of services to be rendered by the governmental affairs representative, and shall include the salary to be paid as well as the duration of the employment.

35 Miss. Admin. Code Pt. 2, R. 102 Rule 102

The representative shall register with the Office of the Secretary of State, and shall provide the Division with proof of such registration by providing certified copies of all information submitted to the Secretary of State.

35 Miss. Admin. Code Pt. 2, R. 103 Rule 103

One (1) year from the date of entry into the contract for employment as a governmental affairs representative, the representative shall submit an annual report to the Division, using required forms.

35 Miss. Admin. Code Pt. 2, R. 104 (Reserved)

Chapter 22 Exchanges, Credits and Refunds

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

Permittees holding package retailer’s permits may allow a customer to return bottles of package liquor for exchange or refund as long as the liquor was, in fact, purchased from the permittee’s business, and as long as a receipt reflecting that the liquor was sold to the patron by the permittee is presented by the patron.

35 Miss. Admin. Code Pt. 2, R. 101 Rule 101

A permittee may not issue a refund or allow an exchange for liquor purchased from any other source.

35 Miss. Admin. Code Pt. 2, R. 102 (Reserved)

Chapter 23 Sale of Soft Drinks, Ice, Juices, Mixers, and Other Items by Package Retailers

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

Package retailers may sell wine glasses, corkscrews, ice, soft drinks, juices, mixers, and other non-alcoholic beverages commonly used to mix with alcoholic beverages, for consumption off the premises. Additionally, package retailers may sell edibles for consumption off the premises.

35 Miss. Admin. Code Pt. 2, R. 101 Rule 101

Wine glasses shall include glassware that is manufactured and marketed primarily for wine consumption as well as plastic stemware commonly used in drinking wine. Other types of plastic containers, styrofoam, and paper cups of all other types are not included and may not be sold or used for consumption on the premises. In addition, industry supplied consumer items may not be offered for sale by package retailers.

35 Miss. Admin. Code Pt. 2, R. 102 Rule 102

Sales of ice must be limited to commercially bagged ice in original sealed and unopened bags containing five (5) or more pounds.

35 Miss. Admin. Code Pt. 2, R. 103 Rule 103

Soft drinks include original commercially sealed and unopened containers. Fountain drinks are not considered soft drinks under this regulation.

35 Miss. Admin. Code Pt. 2, R. 104 Rule 104

Juices shall include fresh, frozen, or concentrated non-alcoholic beverages extracted from fruits and vegetables of all types packaged in original commercially sealed and unopened containers.

35 Miss. Admin. Code Pt. 2, R. 105 Rule 105

Mixers are non-alcoholic beverages in a liquid and dry form commonly used to dilute or enhance an alcoholic drink or cocktail, packaged in original commercially sealed and unopened containers. The only dry mixers that shall be sold are those dry mixers which are specifically produced and marketed for the express purpose of mixing with the alcoholic beverage. Product

commonly known as “margarita salt” is considered a dry mixer and may be sold by package retailers. Dry products which may be mixed with alcoholic drinks but which are not specifically produced and marketed for that purpose are not allowed. Any dry mixer about which there is any doubt shall be submitted to the Department for prior approval.

35 Miss. Admin. Code Pt. 2, R. 106 Rule 106

Sale of any items listed above shall in no way be used to promote, persuade, or influence the sale of alcoholic beverages. Therefore, the permittee cannot give as a gift or reduce the price of these items when the same is conditioned on the purchase of an alcoholic beverage.

35 Miss. Admin. Code Pt. 2, R. 107 Rule 107

Any questions regarding the permissibility of products intended for sale by package retailers governed by this regulation should be submitted, in writing, to the Chief of Enforcement.

35 Miss. Admin. Code Pt. 2, R. 108 Rule 108

A Manufacturer or its representative may, upon the consent of the Package Retailer, assemble bonus packs at the licensed premises so long as such items packaged with the alcohol are limited to those items listed in Section 100 of this Chapter. Bonus Packs are defined as the combination of an alcoholic beverage and another item listed in Section 100 of this Chapter. Such Section 100 items may be provided either by the package retailer or the Manufacturer or its representative. Package Store Retailers may not separate bonus packs after such packs are assembled by the manufacturer or its representative. Further, a bonus pack must be assembled by the manufacturer or its representative. It may not be assembled by the package retailer nor may manufacturers provide bonus pack materials to the retailer for future assembly.

35 Miss. Admin. Code Pt. 2, R. 109 Rule 109

Edibles are fruits and foods that have been submerged in alcohol and sold in containers containing not less than 50mL of product, as determined by combining the fruit and/or food and alcohol contained in the container. All such products are considered to be alcoholic beverages and must be purchased by retailers in a manner compliant with all requirements necessary to purchase and resell alcoholic beverages. Except as stated in this regulation, edibles will be treated the same as any other alcoholic beverage product.

35 Miss. Admin. Code Pt. 2, R. 110 (Reserved)

35.II.02.23 Revised effective November 15, 2023

Chapter 24 Check Cashing

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

The holder of a package retailer's permit is authorized to cash checks for their face value without a charging fee. A holder is prohibited from charging a fee for cashing a check.

35 Miss. Admin. Code Pt. 2, R. 101 (Reserved)

35.II.2.24 revised effective December 1, 2020

Chapter 25 Alcohol Delivery

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

A retailer may offer home delivery of alcohol ordered by its patrons based on the type of alcohol permit it has. A retailer with a beer permit will be able to offer delivery of beer, light wine and/or light spirits products. A retailer with a package retailer permit will be able to offer delivery of sealed alcoholic beverages. A retailer with an on-premises permit will be able to offer delivery of one bottle of wine for every two entrees ordered.

35 Miss. Admin. Code Pt. 2, R. 101 Retailers can accept orders on-line, in-person, or over the phone

35 Miss. Admin. Code Pt. 2, R. 102 Rule 102

A retailer must obtain a delivery service permit in order to deliver alcohol to patrons. If a retailer wishes to pay a service to deliver, it must enter into a contract with a delivery company that has a delivery service permit.

35 Miss. Admin. Code Pt. 2, R. 103 Rule 103

Deliveries cannot be made to any location more than 30 miles from the retailer’s premises. This distance shall be measured in a straight line, such as air line distance, rather than the usual route of traffic travel.

35 Miss. Admin. Code Pt. 2, R. 104 Rule 104

Deliveries cannot be made in areas that are dry for the sale of alcoholic beverages as indicated by the Wet/Dry map located on the Department’s website. Delivery is available to any residences located in qualified resort areas as listed in any subsection of Miss. Code Section 67-1-5(o)(iii).

35 Miss. Admin. Code Pt. 2, R. 105 Rule 105

Deliveries must be made during legal hours of sale for alcoholic beverages.

35 Miss. Admin. Code Pt. 2, R. 106 Rule 106

Alcohol cannot be delivered to anyone under the age of 21, to anyone who is visibly intoxicated, to other retailers, or for resale.

35 Miss. Admin. Code Pt. 2, R. 107 Rule 107

Before providing alcohol to the recipient, the deliverer must first utilize scanning software on the recipient’s identification to confirm that the recipient is over the age of 21. The software must also collect the recipient’s name and date of birth. The deliverer must maintain this information for twelve (12) months and be subject to review by the Division upon request.

35 Miss. Admin. Code Pt. 2, R. 108 Rule 108

The deliverer shall return all alcohol to the retailer if: 1. The recipient is under the age of 21, presents identification that is not his or hers, refuses to present identification, or refuses to accept delivery; or 2. The deliverer determines the presence of illegal conduct, overconsumption of alcohol or determines that the environment is unsafe for consumption of alcohol.

35 Miss. Admin. Code Pt. 2, R. 109 Rule 109

Alcohol may be ordered from the retailer as authorized by law. Beer, light wine, and light spirit products may be delivered in bottles or cans. Such products may also be delivered by draft or glass so long as the product is delivered in a sealed container. Alcoholic beverages may be delivered from package retailers in closed, sealed bottles. Restaurants may only deliver one bottle of wine per two entrees ordered and cannot deliver any distilled spirits of any type

containing more than 6% alcohol by weight (including, but not limited to, bottles, shots or mixed drinks using distilled spirits).

35 Miss. Admin. Code Pt. 2, R. 110 Rule 110

Delivery to consumers is only available for retailers. Wholesalers, distributors, and manufacturers (including, but not limited to, distilleries, native distilleries, wineries, native wineries, breweries, small craft breweries and microbreweries) cannot deliver alcohol to consumers. Delivery is only available for individual consumption. Alcohol cannot be delivered to retailers, wholesalers, distributors or manufacturers under a delivery permit. Package Retailers who have a wholesale permit may continue to deliver alcoholic beverages to licensed package retailer and on-premises permittees.

35 Miss. Admin. Code Pt. 2, R. 111 (Reserved)

35.II.2.25 revised effective October 16, 2021

Subpart 3 Permitting

Chapter 01 Bonds

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

The Department may require any person engaged in the business of manufacturing or retailing alcoholic beverages to enter into a bond under Miss. Code Ann. Section 27-71-21. The amount of bond that may be required of the holder of any retailer’s permit under Miss. Code Ann. Section 27-71-21 shall be five thousand dollars ($5,000.00). This bond shall be in such form as required by the Division.

35 Miss. Admin. Code Pt. 2, R. 101 Rule 101

New, revised, or different bonds may be required by the Division at any time for any carrier, manufacturer and/or distributor, and any holder of a retailer’s bond.

35 Miss. Admin. Code Pt. 2, R. 102 Rule 102

If a retailer who has been required to obtain a bond by the Department receives notice that his bond is to be cancelled during the permit year, the permittee must immediately provide notification in writing that the bond is being cancelled and must provide copies of any documentation received by the permittee from the bonding company. Furthermore, the permittee shall obtain another bond or deposit the equivalent amount of the bond required in cash or securities with the State Treasurer pursuant to Miss. Code Ann. Section 27-71-21 prior to the cancellation date of the original bond.

35 Miss. Admin. Code Pt. 2, R. 103 Rule 103

Failure to submit a valid bond when required to do so by the Department by the cancellation date will result in automatic suspension of sales until a valid bond is received. In addition, the Department may take punitive action against the permittee for failure to timely submit a bond.

35 Miss. Admin. Code Pt. 2, R. 104 (Reserved)

Chapter 02 Permit Limit

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

No person, either individually or as a member or officer of a limited liability company, , partnership or association, or as a stockholder, officer or director in a corporation, shall own or control any interest whatsoever in more than one package retailer's permit. Furthermore, no

spouse or relative of, nor any other person living in the same household as a person owning an interest in a package retailer's permit shall own an interest whatsoever in any other package retailer's permit.

35 Miss. Admin. Code Pt. 2, R. 101 Rule 101

A person, either individually or as a member or officer of a limited liability company,, partnership or association, or as a stockholder, officer or director in a corporation, may own an interest in one package retailer’s permit while owning an interest in one or more on-premises retailer’s permit. This chapter allows multiple ownership of on-premises retailer permits and allows any person holding an on-premises retailer permit to simultaneously own an interest in a single package retailer's permit.

35 Miss. Admin. Code Pt. 2, R. 102 Rule 102

However, this chapter does not authorize a person to purchase or otherwise transfer alcoholic beverages from one permitted place of business to another. Any violation of the provisions of Miss. Code. Ann. Sections 67-1-41, 67-1-43 and 27-75-5 will be grounds for revocation of the permit or permits issued.

35 Miss. Admin. Code Pt. 2, R. 103 Rule 103

This chapter shall not be construed to prohibit rendering professional services for more than one package retailer so long as such professional services do not constitute an ownership interest based on the fee being collected. If the fee paid to the professional is dependent upon the amount of alcohol being sold, this will constitute an ownership interest.

35 Miss. Admin. Code Pt. 2, R. 104 (Reserved)

35.II.3.02 revised effective December 1, 2020

Chapter 03 Filing Fee

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

The $25.00 filing fee is to reimburse the Division for the costs associated with investigating the qualifications of an applicant for a permit, and is forfeited whether the Department grants the permit applied for or not.

35 Miss. Admin. Code Pt. 2, R. 101 (Reserved)

Chapter 04 Permittee Must Maintain Qualifications and Pay Taxes

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

The failure of a permittee to maintain the qualifications necessary for the issuance of a permit pursuant to Miss. Code Ann. Section 67-1-57, including the failure to pay any taxes due the State, may result in the revocation or suspension of a retailer’s alcoholic beverage permit.

35 Miss. Admin. Code Pt. 2, R. 101 (Reserved)

Chapter 05 Permit Transfer

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

No permit or any beneficial interest in a permit shall be transferred by any permittee to any other person or any other place except with the written consent of the Department. A permit shall not be eligible for transfer if it is the subject of an ongoing administrative disciplinary action, including any action under appeal.

35 Miss. Admin. Code Pt. 2, R. 101 Rule 101

Notice of the intended transfer of location or beneficial interest must be published for two consecutive issues in a newspaper having general circulation in the city or town in which the transfer applicant's place of business is located. In instances where the business is not located within a city or town, publication should occur in a newspaper of general circulation in the county where the business is located. Proof of publication must be filed with the application to transfer location or interest. 102 This chapter shall not be construed to require publication of a mere change in trade name or the officers of a corporation where there is no change in the ownership. However, any such contemplated changes must be submitted to the Department for prior approval. 103 An applicant for transfer of ownership of a permit for which there exists an exemption from distance requirements as provided for in Mississippi Code Section 67-1-51(3) must submit an updated waiver from the funeral home or church. If the funeral home or church refuses to sign a new waiver, a transfer may not be initiated. 104 All applicants for permits and/or proposed recipients of beneficial interest in such permits must be at least twenty-one (21) years of age and may not have a felony conviction in any court. If the conviction is at least ten (10) years old and is not for a crime of violence or violation of controlled substance laws, the conviction does not automatically disqualify a person from being approved for a permit. The Department may consider such felony convictions in determining whether all other qualifications are met. 105 An individual who is an applicant for a package retailer's permit must be a resident of the State of Mississippi. If the applicant is a partnership, each member of the partnership must be a resident of the state. If the applicant is a corporation or LLC, the designated manager must be a resident of the state. 106 (Reserved)

35.II.3.05 revised effective March 9, 2026

Chapter 06 Death or Disability of a Permittee

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

In case of death or physical or mental disability of any permittee, the estate or guardianship of the permittee shall be allowed to operate the permitted business for a period not exceeding sixty (60) days after the death or disability. During the 60-day period, any member of the permittee’s immediate family may make application to the Department for the unexpired portion of the permit of the decedent to be assigned to him.

35 Miss. Admin. Code Pt. 2, R. 101 Rule 101

If such application is approved, the applicant shall be granted the right, without the payment of an additional permit fee, to operate the permitted place of business for the unexpired portion of the time of the original permit.

35 Miss. Admin. Code Pt. 2, R. 102 Rule 102

It shall also be permissible for the Executor of the Estate or guardian of the disabled permittee to sell the permittee’s alcoholic beverage inventory to another permitted place of business, with the written approval of the Division, following the procedure outlined in Title 35, Part II, Subpart 4, Chapter 1 of the Mississippi Administrative Code.

35 Miss. Admin. Code Pt. 2, R. 103 Rule 103

If the application is denied, the inventory of alcoholic beverages, with prior approval from the Division, may be sold to another permitted retailer. In the event that the inventory cannot be sold to another retailer, the Division may take possession of the remaining unopened inventory and refund the estate at the current wholesale price, less a charge for handling and transportation. The items returned will then be placed in the Division’s inventory.

35 Miss. Admin. Code Pt. 2, R. 104 Rule 104

However, no credit will be given for special orders, novelty items contained in dual packaged products, ceramic decanters, holiday packages or stale, damaged or delisted items. Such merchandise shall not be redeemed under any circumstances.

35 Miss. Admin. Code Pt. 2, R. 105 (Reserved)

Chapter 07 Qualified and Temporary Resort Areas

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

Qualified Resort Area: 1. The following definitions shall be used when determining if an area qualifies as a Qualified Resort Area under Miss. Code Section 67-1-5(o)(iii): a. “Contiguous acres”, when referenced within Miss. Code Section 67-1-5(o)(iii)(11), shall mean acreage touching or connected throughout in an unbroken sequence and titled to a common owner. A public or private street or road shall not be considered to break the sequence or connectivity of the acreage. b. “Course”, when referenced within Miss. Code Section 67-1-5(o)(iii)(11) and (12) and not preceded by the word “golf”, shall mean a series of lectures or lessons in a particular subject, leading to an examination or qualification. c. “Provides lodging accommodations”, when referenced within Miss. Code Section 67-1- 5(o)(iii)(10), shall mean to make available for use or supply a lodging facility owned or leased by the permittee. 2. A qualified resort area must be clearly established, understood and agreed upon by the resort area community. A community may be considered for a qualified resort area classification by the Department by submitting an application. 3. The application must be submitted by the President of the Board of Supervisors or the Mayor or Mayors of the municipality or municipalities affected. In the event the President of the Board of Supervisors or the Mayor refuses to submit such application and/or votes against recommending this area be designated a resort, the same may be submitted by not less than 100 adult citizens of the community to be affected, and shall in all instances include the following items: a. A map clearly marked to indicate the specific area under consideration. GPS coordinates should be used to delineate boundary lines. b. Reasons why the particular area attracts tourists, transients and/or vacationers and therefore should be designated as a qualified resort area. c. Endorsements by civic clubs located near the area under consideration. d. Assurance from the Sheriff or Sheriffs of the area that he will enforce the Local Option laws of the State of Mississippi, and the rules and regulations of the Division. If the area is

located within a municipality, such assurance shall also be given by the Chief of Police of such municipality or municipalities. e. A certified copy of the order or orders as entered on the minute books of the governing body. If the governing body wishes for the hours of sale to be limited, the order should contain this request. f. Proof of publication of legal notices and all public opinion responses. Legal notice must be printed once each week for two consecutive weeks in a newspaper having general circulation in the area. The notice must state that an application for classification as a qualified resort area is being filed, identify the proposed resort area, a request for public opinion from residents in the area under consideration, and that approval will permit the operation of open bars and the sale of alcoholic beverages in the area. 4. Adjacent or affected areas may either join in or file objections to the application with the Department.

35 Miss. Admin. Code Pt. 2, R. 101 Temporary Resort Area:

The Department is authorized to approve a certain area or locality as a temporary resort area if the particular location is in the process of being developed as a qualified resort area. Approval of this type of resort designation is contingent upon the applicant submitting the following: a. A resolution from the Board of Supervisors of the county where such proposed area is located. The resolution must specifically state that the Board is of the opinion that the area in question is in the process of being developed as a resort area. In addition, the resolution must set forth the basis for the Board's conclusion. b. A map clearly marked to indicate the specific area under consideration. GPS coordinates should be used to delineate boundary lines. c. A list of steps taken or to be taken in developing the area as a qualified resort area and the reasons such steps will result in the attraction of tourists, transients and/or vacationers. d. Endorsements by civic clubs located near the area under consideration. e. Assurance from the Sheriff of the area that he will enforce the Local Option laws of the State of Mississippi, and the rules and regulations of the Division. f. Proof of publication of legal notice and all public opinion responses. Legal notice must be printed once each week for two consecutive weeks in a newspaper having general circulation in the area. The notice must state that an application for classification as a temporary resort area is being filed, identify the proposed resort area, a request for public opinion from residents in the area under consideration, and that approval will permit the operation of open bars and the sale of alcoholic beverages in the area. 2. The temporary resort area designation is for a term of one year. Prior to the expiration of the year period, the applicant must establish and prove that the proposed area meets all of the statutory qualifications for a qualified resort area.

35 Miss. Admin. Code Pt. 2, R. 102 (Reserved)

35.II.3.07 revised effective December 1, 2020

Chapter 08 Common Carriers Reporting

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

Common carriers, in lieu of purchasing alcoholic beverages for resale from the Division, must file a Common Carrier Reporting Form. The common carrier reporting forms and the total amount due must be filed by the 20 th of the month for the preceding month. The report will be audited as required by the Division.

35 Miss. Admin. Code Pt. 2, R. 101 Rule 101

A common carrier must maintain detailed records that reflect where alcoholic beverages were purchased, the purchase price, the date of the purchase and the taxes paid if the alcoholic beverages were purchased from a source (i.e. wholesaler or ship chandler) other than the Department. The records and inventory of alcoholic beverages shall be open to inspection by Division or any of its duly authorized agents at any time.

35 Miss. Admin. Code Pt. 2, R. 102 Rule 102

If common carriers purchase the alcoholic beverages they sell while traveling through the State of Mississippi from the Division, the Common Carrier Reporting Form does not have to be filed.

35 Miss. Admin. Code Pt. 2, R. 103 Rule 103

Alcoholic beverages can only be served and/or consumed while inside the permitted common carrier. Common carriers are prohibited from serving alcoholic beverages or allowing the consumption of alcoholic beverages while stopped in a dry county.

35 Miss. Admin. Code Pt. 2, R. 104 Rule 104

In the event that a common carrier has multiple permits for a business establishment, the common carrier may store alcoholic beverages in a common storage facility as described and regulated in Title 35, Part II, Subpart 2, Chapter 3 of the Mississippi Administrative Code, if and only if the alcoholic beverages were purchased directly from the Department.

35 Miss. Admin. Code Pt. 2, R. 105 (Reserved)

Chapter 09 Qualifications of Employees and Managers

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

The permittee shall be responsible, at all times, for acts of manager(s) and/or employee(s) which are in violation of the Local Option laws or rules and regulations, and which take place at the permitted establishment regardless of whether the permittee is present.

35 Miss. Admin. Code Pt. 2, R. 101 Rule 101

Any permittee shall not knowingly employ any individual who has been convicted of a felony within the past three years immediately preceding employment or who has been convicted and incarcerated for any crime within a period of one year immediately preceding employment. Furthermore, a permittee shall not employ any person under the age of eighteen (18) to wait on tables, take orders for, or deliver orders of alcoholic beverages and may not employ any person under the age of twenty-one (21) to tend bar or act in the capacity of bartender.

35 Miss. Admin. Code Pt. 2, R. 102 Rule 102

Permittees are required to make an inquiry into whether an employee meets the above criteria and maintain records of this information.

35 Miss. Admin. Code Pt. 2, R. 103 Rule 103

Prior to a proposed manager assuming managerial responsibility, the permittee must obtain approval from the Division. To obtain approval of the proposed manager, the permittee must file the following forms: 1. Application for change in manager’s or assistant manager’s name on alcoholic beverage license; 2. Personal Record Form; 3. Two fingerprint cards;

The applicable processing fee, in certified funds, for submission of fingerprints to the FBI.

35 Miss. Admin. Code Pt. 2, R. 104 Rule 104

In addition, each proposed manager must possess all qualifications required of a permittee. Manager identification cards may be suspended or revoked for valid cause.

35 Miss. Admin. Code Pt. 2, R. 105 Rule 105

The Department may impose fines, or may suspend or revoke the permit(s) of any permittee in violation of this chapter.

35 Miss. Admin. Code Pt. 2, R. 106 (Reserved)

Chapter 10 Management Agreement

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

The permittee in all cases must operate the business for himself and have direct control over its entire operation.

35 Miss. Admin. Code Pt. 2, R. 101 Rule 101

No management agreement for a permitted place of business shall be effective until the Department has approved the same.

35 Miss. Admin. Code Pt. 2, R. 102 Rule 102

The management agreement must provide that the permittee will be absolutely responsible for any and all violations of the Local Option laws or rules and regulations occurring on or about the licensed premises.

35 Miss. Admin. Code Pt. 2, R. 103 Rule 103

Where the law authorizes an on-premises retailer’s permit to be issued to a restaurant or hotel, the operation of the lounge located on its premises shall be in conjunction with the operation of the restaurant. Therefore, the operation of the restaurant and lounge shall be considered one and the same and must be under the direction of one manager.

35 Miss. Admin. Code Pt. 2, R. 104 (Reserved)

Chapter 11 Application Requirement

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

The following information will be required by the Division prior to, and at any time after, the issuance of a retailer permit: 1. A properly completed application for Retailer’s Permit 2. Proof of Publication Affidavit on Legal Notice pursuant to Miss. Code Ann. Section 67-2- 53(2) to include two (2) tear sheets from the newspaper in which said the Notice was published. 3. Proof of compliance with the Federal statutes and regulations applicable to the permit being applied for which will include a copy of the receipt for purchase of a Federal Use Stamp or a copy of the check in payment thereof. 4. A copy of the Applicant’s deed or executed lease agreement on the premises where the business is to operate. If the permittee receives notice that the lease is to be cancelled, or if the permittee transfers the deed during the permit year, the permittee must immediately notify the Division in writing. The permittee shall obtain an executed renewal lease prior to the expiration date of the existing lease if the lease is to expire during the permit year. If the permittee previously submitted a deed or multi-year lease on the permitted premises, prior to any permit renewal, the permittee must submit an affidavit attesting that there will be no changes in said deed or lease. Failure to submit a valid renewal lease, deed or affidavit will

result in the automatic suspension of sales until a valid lease is received by the Division. Further, the Department may revoke the permit for failure to timely submit an executed renewal lease, deed or affidavit. A valid copy of any deed or lease may be required at any time after issuance of the original permit. 5. A copy of the floor plan of the building where the prospective permittee proposes to operate the business under the permit. 6. A complete, current and accurate summary financial statement(s) as follows: a. Sole Owner Business – on the owner. b. Partnership – on the partnership and each partner thereof. c. Corporation for profit (Non Profit excepted) – on the corporation and; i. On-Premises Retailer – each officer who owns ten percent (10%) or more of the stock of such corporation and all major stockholders. ii. All other permit classes –each officer and all major stockholders. d. Limited Liability Company – on the LLC and each member thereof. e. In addition to the foregoing, if any applicant for a permit is doing business with out-of- state bank(s), letter(s) from said bank(s) verifying the current status of any and all loans, checking and savings accounts, certificates of deposit and a general recommendation from said bank(s) must be included therein. 7. A statement of ownership. 8. Personal records and fingerprint forms 9. Sales tax registration including the Mississippi Sales Tax Number 10. Food Service Permit 11. A copy of a waiver of the distance requirements from a church or funeral home if applicable. Where the transfer of a permit results in a change in use (i.e. from an On-Premises Retailers Permit to a Package Retailer’s Permit or vice versa) a new waiver will be required. Bed and breakfast inns listed on the National Register of Historic Places are exempt from all distance requirements.

35 Miss. Admin. Code Pt. 2, R. 101 Rule 101

The Alcoholic Beverage Control Division may, in its discretion, require any applicant for a retailer permit to submit any and all other information and/or reports which it may deem necessary and expedient in the consideration of an existing permit or in the processing of any original permit.

35 Miss. Admin. Code Pt. 2, R. 102 (Reserved)

Chapter 12 Hotels

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

A hotel, as that term is defined by Miss. Code Ann. Section 67-1-5(l), possessing fifty (50) or more sleeping rooms and lying within a municipality having a population exceeding twenty-five thousand (25,000) shall not be required to have a dining room, or otherwise serve food, as a requirement to qualify for an on-premise alcoholic beverage permit.

35 Miss. Admin. Code Pt. 2, R. 101 (Reserved)

Chapter 13 Temporary Alcoholic Beverage Permits

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

Temporary retailer's permits may be issued by the Department. These permits allow the purchase and resale of alcoholic beverages and native wines during legal hours and only on the premises described in the permit.

35 Miss. Admin. Code Pt. 2, R. 101 Rule 101

An alcoholic beverage permit may not be issued or transferred while there is pending in the Courts, or before the Department, any charge of violating the Local Option laws or rules and regulations, or the laws against gambling in the State, pursuant to Miss. Code Ann. Section 67-1- 67.

35 Miss. Admin. Code Pt. 2, R. 102 Rule 102

All permit fees, filing fees, and additional privilege fees are to be paid by the temporary permittee, in advance, with certified funds.

35 Miss. Admin. Code Pt. 2, R. 103 (Reserved)

35 Miss. Admin. Code Pt. 2, R. 200 Rule 200

A Class 1, one-day temporary permit, authorizing the sale of alcoholic beverages by the drink, may be issued to a bona fide nonprofit civic or charitable organization. An entity may be considered a bona fide nonprofit civic or charitable organization by submitting documentation evidencing that it is both deemed tax exempt by the Internal Revenue Service pursuant to 26 U.S. Code Section 501 and registered with the Mississippi Secretary of State as a non-profit entity. If granted, the permit shall allow the sale and consumption only at the authorized location during the times permitted for other on-premises retailer locations in the city or county where the permit is issued pursuant to Title 35, Part II, Subpart 2, Chapter 4 of the Mississippi Administrative Code.

35 Miss. Admin. Code Pt. 2, R. 201 Rule 201

Application forms provided by the ABC for Class 1 Temporary Alcoholic Beverage Permits shall be completed by the applicant, under oath, and furnished to the Department, setting forth that the applicant complies with the requirements of Miss. Code Ann. Sections 67-1-11, 67-1- 37, 67-1-51 (2), and (3), 67-1-55, 67-1-57, excluding paragraph (e), and 67-1-59. The Department may deny an application for failure to timely complete the application or, upon review of the application, may deny the application based on a reasonable belief that the applicant does not meet the required qualifications. If it is determined that an organization is not following ABC rules and regulations while operating under a temporary permit, this may provide a reason for ABC to believe that the organization will sell or knowingly permit its agents or employees to unlawfully sell alcohol in a manner contrary to law and, accordingly, provide a basis for denying future temporary permits to the organization. Any denial of a Temporary Alcoholic Beverage Permit, or an appeal from such denial, shall be conducted in accordance with Title 35, Part II, Subpart 1, Chapter 3 of the Mississippi Administrative Code and Miss. Code Ann. Section 67-1-39.

35 Miss. Admin. Code Pt. 2, R. 202 Rule 202

All alcoholic beverages purchased for resale by a temporary permittee shall be purchased from a package retailer in the county in which the permit is located. The applicant shall set forth on his application the package retailer(s) from which said purchase(s) will be made, including the quantity to be purchased. All applicable sales and use taxes must be paid by the Class 1 Temporary Alcoholic Beverage Permit holder. Any bottled alcoholic beverages remaining in the possession of the Class 1 Temporary Alcoholic Beverage Permit holder may, with approval of the package retailer, be returned to the package retailer from which they were purchased. In no event may damaged alcoholic beverages, or partials, be returned to a package retailer.

35 Miss. Admin. Code Pt. 2, R. 203 Rule 203

Any package retailer or Class 1 Temporary Alcoholic Beverage Permit holder violating the terms of this chapter may, at the discretion of the Department, have his permit suspended or revoked, or may be denied a future permit by the Department.

35 Miss. Admin. Code Pt. 2, R. 204 Rule 204

A Class 2 Temporary Alcoholic Beverage Permit may be issued only in conjunction with a transfer application submitted by a prospective permittee seeking an on-premises retailer or package retailer permit currently in effect at the particular location for which the transfer is sought.

35 Miss. Admin. Code Pt. 2, R. 205 (Reserved)

35 Miss. Admin. Code Pt. 2, R. 300 Rule 300

Application forms for Class 2 Temporary Alcoholic Beverage Permits provided shall be completed by the applicant, under oath, and furnished to the Department, setting forth that the applicant complies with Miss. Code Ann. Sections 67-1-11, 67-1-37,67-1-51 (2) and (3), 67-1- 57, and 67-1-59. The applicant shall have fourteen (14) days from the issuance of the temporary permit to submit all documents and other materials required by Title 35 Part II, Subpart 3, Chapter 11 of the Mississippi Administrative Code. Upon the failure of the applicant to submit these matters within required time, the temporary permit will lapse and liquor sales will be prohibited. The Department may deny an application for failure to timely complete the application or, upon review of the application, may deny the application based on a reasonable belief that the applicant does not meet the required qualifications. Any denial of a permit, or an appeal of such denial, shall be conducted in accordance with Title 35, Part II, Subpart 1, Chapter 3 of the Mississippi Administrative Code and Miss. Code Ann. Section 67-1-39.

35 Miss. Admin. Code Pt. 2, R. 301 Rule 301

Upon approval of a Class 2 Temporary Alcoholic Beverage Permit, the temporary permittee must purchase his alcoholic beverages directly from the Department and/or, with the Department's prior approval, purchase the remaining inventory of the previous permittee. Alcoholic beverage purchases from the Division are to be paid by the temporary permittee, in advance, with certified funds. Any Class 2 temporary permittee shall pay additional privilege fees as set forth in Miss. Code Ann. Section 27-71-5(m). Any accumulated balances of purchases and additional privilege fees of the original on-premises retailer permittee shall be transferred to the new permanent transferee.

35 Miss. Admin. Code Pt. 2, R. 302 Rule 302

A Class 2 Temporary Alcoholic Beverage Permit issued to temporary permittee shall run for a period of seventy (70) days unless applicant fails to meet the fourteen (14) day requirement for complying with Title 35, Part II, Subpart 3, Chapter 11 of the Mississippi Administrative Code. An application for a Class 2 Temporary Alcoholic Beverage Permit shall be filed at least seventy (70) days prior to the expiration of the original permit sought to be transferred. In the event less than seventy (70) days remains on the original permit, then a renewal application, signed by the original owner, must accompany the Class 2 Temporary Alcoholic Beverage Permit application.

35 Miss. Admin. Code Pt. 2, R. 303 Rule 303

Upon issuance of a Class 2 Temporary Alcoholic Beverage Permit, an Administrative Hold shall be placed on the original permit. The time remaining on the original permit shall continue to run, but no alcoholic beverages may be purchased from the Division on the original permit. Furthermore, alcoholic beverages can only be sold and consumed pursuant to the Class 2 Temporary Alcoholic Beverage Permit and not by authority of the original permit as long as the Administrative Hold is in force. An Administrative Hold may be removed following the

Department's approval of a transfer or following proof that the original owner has retained the particular location and the Class 2 temporary permittee no longer desires the permit.

35 Miss. Admin. Code Pt. 2, R. 304 Rule 304

The hours for sale and consumption of alcoholic beverages for Class 2 Temporary Alcoholic Beverage permittees shall be the hours authorized for similar permittees located in the city or county where the permit to be transferred is located pursuant to Title 35, Part II, Subpart 2, Chapter 4 of the Mississippi Administrative Code, or as set by state law.

35 Miss. Admin. Code Pt. 2, R. 305 (Reserved)

35 Miss. Admin. Code Pt. 2, R. 400 Rule 400

A Class 3 temporary one-day permit may be issued to qualified retail establishments and authorizes the complimentary service of wine only, including native wine, to patrons attending an open house or promotional event, for consumption only on the premises described on the temporary permit. This permit shall only allow consumption during the times permitted for other on-premise retailer locations in the city or county where the permit is issued pursuant to Title 35, Part II, Subpart 2, Chapter 4 of the Mississippi Administrative Code. No retailer may receive more that twelve (12) Class 3 temporary permits in a calendar year. A Class 3 temporary permit shall not be issued to a retail establishment that holds either a merchant permit issued under Miss. Code Ann. Section 67-1-51(l), or holds a permit issued under Miss. Code Ann. Chapter 3, Title 67 authorizing the sale of beer or light wine.

35 Miss. Admin. Code Pt. 2, R. 401 Rule 401

Application forms provided by the ABC for a Class 3 temporary permits shall be completed by the applicant, under oath, and furnished to the Department, setting forth that the applicant complies with the requirements of Miss. Code Ann. Sections 67-1-11,67-1-37, 67-1-51 (2), and (3), 67-1-55, 67-1-57, excluding paragraph (e), and 67-1-59. The Department may deny an application for failure to timely complete the application or, upon review of the application, may deny the application based on a reasonable belief that the applicant does not meet the required qualifications. Any denial of a Temporary Alcoholic Beverage Permit, or an appeal from such denial, shall be conducted in accordance with Title 35, Part II, Subpart 1, Chapter 3 of the Mississippi Administrative Code and Miss. Code Ann. Section 67-1-39.

35 Miss. Admin. Code Pt. 2, R. 402 Rule 402

All alcoholic beverages purchased for resale by a Class 3 temporary permit holder shall be purchased from a package retailer in the county in which the permit is located. The applicant shall set forth on his application the package retailer(s) from which said purchase(s) will be made, including the quantity to be purchased. All applicable sales and use taxes must be paid by the Class 3 temporary permit holder. Any bottled alcoholic beverages remaining in the possession of the Class 3 temporary permit holder may, with approval of the package retailer, be returned to the package retailer from which they were purchased. In no event may damaged alcoholic beverages, or partials, be returned to a package retailer.

35 Miss. Admin. Code Pt. 2, R. 403 (Reserved)

Chapter 14 Caterer’s Permits

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

A caterer’s permit authorizing the purchase and resale of alcoholic beverages by caterers of food may be issued by the Department upon application, if the applicant meets the qualifications as provided for by Miss. Code Ann. Sections 67-1-53, 67-1-55 and 67-1-57.

35 Miss. Admin. Code Pt. 2, R. 101 Rule 101

Caterers are subject to all rules and regulations which apply to on-premise retailers.

35 Miss. Admin. Code Pt. 2, R. 102 Rule 102

Caterers shall provide notice of the location of the catered event 10 days prior to the event. A copy of the permit shall be prominently displayed on the premises of the catered event.

35 Miss. Admin. Code Pt. 2, R. 103 Rule 103

Alcoholic Beverage Control Division agents shall be permitted to enter the catered premises for the purpose of inspecting the premises and carrying out any enforcement responsibilities necessary. Should the permittee, its agents, servants or employees interfere, impede or hinder the agents from carrying out their duties under the provisions of the law and regulations pertaining to the sale of alcoholic beverages, it shall be the duty of the Department to impose a penalty amounting to either suspension or revocation of the caterer’s permit.

35 Miss. Admin. Code Pt. 2, R. 104 Rule 104

Records are to be maintained by the caterer which clearly reflects the receipt of alcoholic beverages from the Department, as well as the sale of alcoholic beverages and all food sales. All records shall be kept and maintained separately from the records pertaining to any on-premises permitted place of business operated by the caterer. All books, papers, records or other data which pertain to purchases, costs and expenditures incurred by the permittee incident to the operation of the catering business shall be open to inspection by any duly authorized employee of the Department. Caterers must comply with all record keeping procedures as outlined in Title 35, Part II, Subpart 2, Chapter 6 of the Mississippi Administrative Code.

35 Miss. Admin. Code Pt. 2, R. 105 Rule 105

The Department may revoke or suspend the caterer’s permit issued for any violation of the rules, regulations and statutes, as they pertain to alcoholic beverages, by the permittee or any agent, employee, associate, or representative of the permittee, or for violations committed by any guests or individuals present at the catered event.

35 Miss. Admin. Code Pt. 2, R. 106 (Reserved)

Chapter 15 Direct Wine Shipper Permit

35 Miss. Admin. Code Pt. 2, R. 100 General

35 Miss. Admin. Code Pt. 2, R. 101 Rule 101

A person as defined in Miss. Code Ann. Section 67-1-5 may not engage in shipping wine directly to a resident in this state without first applying for and receiving a direct wine shipper’s permit. A direct wine shipper’s permit may be issued by the Department upon receipt of a completed application.

35 Miss. Admin. Code Pt. 2, R. 102 (Reserved)

35 Miss. Admin. Code Pt. 2, R. 200 Application and Renewal

35 Miss. Admin. Code Pt. 2, R. 201 Rule 201

Applicant Qualifications a. An authorized out of state manufacturer or a Mississippi Class 2 or Class 3 manufacturer or permitted wine fulfillment provider; b. A holder of a valid Mississippi use or sales tax permit;

c. Current business registration in state of incorporation; d. Current on all Mississippi taxes; and e. A completed Direct Wine Shipper’s Permit application with application fee of One Hundred Dollars ($100.00).

35 Miss. Admin. Code Pt. 2, R. 202 Rule 202

Active permits must be renewed on an annual basis. Licenses are valid for one (1) year from the date of issuance. At the time of renewal, the licensee must demonstrate continued compliance with all applicable licensing criteria.

35 Miss. Admin. Code Pt. 2, R. 203 (Reserved)

35 Miss. Admin. Code Pt. 2, R. 300 Product Approval

35 Miss. Admin. Code Pt. 2, R. 301 Rule 301

All products intended for sale through direct shipment must be submitted to the Department for product approval.

35 Miss. Admin. Code Pt. 2, R. 302 Rule 302

Applicants must submit an itemized listing of products including brand, size, and SKU and approved COLA through TTB with their initial permit application. A direct wine shipper permit approval is not contingent on product approval. The Department will provide written notice of approved and disapproved products.

35 Miss. Admin. Code Pt. 2, R. 303 Rule 303

Permittees shall include with each quarterly return any new product offerings for approval. A new product includes a different type, vintage, etc. that is not currently approved by the Department.

35 Miss. Admin. Code Pt. 2, R. 400 Taxation and Reports

35 Miss. Admin. Code Pt. 2, R. 401 Rule 401

In addition to sales or use tax that is due under Miss. Code Ann. Sections 27-65-1 et seq. and 27-67-1 et seq., a permittee is assessed a fifteen and one-half percent (15.5%) tax on the sales price of each sale and shipment of wine made to a resident in this state.

35 Miss. Admin. Code Pt. 2, R. 402 Rule 402

A permittee shall remit any taxes due and file a monthly report through use of the Department’s TAP system. No report shall be required for months in which no sales or shipments were made into this state.

35 Miss. Admin. Code Pt. 2, R. 403 Rule 403

The report, together with copies of the invoices, and the payment of all taxes shall be filed with the Department not later than the twentieth (20 th ) day of the month following the month in which the shipment was made. Permittees who fail to timely file and pay taxes as required by this subsection shall pay a late fee in the amount of Fifty Dollars ($50.00).

35 Miss. Admin. Code Pt. 2, R. 404 Rule 404

A permittee shall file a quarterly informational report through use of the Department’s TAP

system not later than the twentieth (20 th ) day of the month following the quarter in which the shipment was made. The report shall include the total amount of wine by type, sold and shipped into or within the state. Any new products offered by the direct wine shipper permittee not previously approved by the Department shall be submitted with the report.

35 Miss. Admin. Code Pt. 2, R. 405 Rule 405

Sales and shipment records must be maintained for at least three (3) years. The records and inventory of wine shall be open to inspection by the Division or any of its duly authorized agents at any time.

35 Miss. Admin. Code Pt. 2, R. 406 (Reserved)

35 Miss. Admin. Code Pt. 2, R. 500 Restrictions

35 Miss. Admin. Code Pt. 2, R. 501 Rule 501

The Department may fine, revoke, or suspend the direct wine shipper permit for violation of any of the Local Option laws or rules and regulations by the permittee or any agent, employee, associate, or representative of the permittee.

35 Miss. Admin. Code Pt. 2, R. 502 Rule 502

A direct wine shipper shall: 1. Sell or ship non-allocated wines that are not offered for distribution through the Department. 2. Sell or ship highly allocated wine listed on the Department website that is contracted through Mississippi distributors, brokers or solicitors. Highly allocated wines are special order products that are on a limited supply and are pre-sold by the broker. Allocated items have ordering restrictions due to the limited supply and are designated as allocated by the Department and supplier. For state allocations, the direct wine shipper may not fill orders until the state allocations are completed. 3. Conspicuously label all containers of wine sold and shipped to a resident into or within this state with the words “CONTAINS ALCOHOL; SIGNATURE OF PERSON AGE 21 YEARS OR OLDER REQUIRED FOR DELIVERY.” The color of lettering must be bold and contrast with packaging.

35 Miss. Admin. Code Pt. 2, R. 503 Rule 503

A direct wine shipper shall not: 1. Sell or ship any light wine, light spirit products or beer that is regulated under Section 67-3-1 et seq. or any alcoholic beverage other than wine. 2. Sell or ship to any licensed suppliers or retailers. 3. Sell or ship wine to any nonresidential address, including lockers or post office boxes. 4. Sell or ship wine that is contracted through Mississippi distributors, brokers or solicitors that is not highly allocated. 5. Sell or ship more than twelve (12) nine–liter cases of wine per calendar year to any one (1) Mississippi address. 6. Sell or ship wine that contains hemp or THC in any variation.

35 Miss. Admin. Code Pt. 2, R. 504 (Reserved)

35 Miss. Admin. Code Pt. 2, R. 600 Delivery of Wine from Direct Wine Shipper Permit Holders

35 Miss. Admin. Code Pt. 2, R. 601 Rule 601

Delivery of wine from a permittee to a consumer must be completed by a common carrier.

35 Miss. Admin. Code Pt. 2, R. 602 Rule 602

Delivery only of wine by a common carrier is not considered to be a sale of wine by the common carrier.

35 Miss. Admin. Code Pt. 2, R. 603 (Reserved)

35.II.3.15 revised effective September 4, 2025

Chapter 16 Alcohol Processing Permit

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

An alcohol processing permit may be issued with the approval of the Department to any person, firm, or corporation upon written application and applicable filing fees to the Division. If the applicant is a corporation, an officer of the corporation must affix their signature upon the application. If the applicant is a partnership, each partner must affix their signature upon the application. The processing permit is a non-retail permit and shall be issued and maintained only on the use of alcoholic beverages for legitimate cooking, processing, or manufacturing purposes and that the applicant meets the qualifications, as provided for by Miss. Code Ann. Sections 67-1-53, 67-1-55 and 67-1- 57. Sales tax is not due on purchases of alcoholic beverages by those holding an alcohol processing permit. The permit holder will be required to obtain a sales and use tax direct pay permit in order to purchase such beverages exempt.

35 Miss. Admin. Code Pt. 2, R. 101 Rule 101

The permittee must indicate the estimated annual amounts of usage of alcoholic beverages. These amounts may be increased upon sworn affidavit of the permittee with the Division. It shall be a violation of these regulations for the permittee to use or possess more alcoholic beverages than set forth in the permit. 102 There shall be no minimum purchase amount required when acquiring alcoholic beverages; however, if the permittee wishes to purchase product from the Division minimum purchasing limits must be followed. All products used by the permittee must be purchased within the State of Mississippi and the permittee will be required to maintain on site storage of all alcoholic beverages. In addition, it shall be mandatory that inventory records be kept and preserved by the permittee for a period of three (3) years and shall include the itemized purchase invoices and tickets bearing the date of purchase and name of the seller of all alcoholic beverages. The Division reserves the right at any time to inspect all such inventory records as well as the permitted premises.

35 Miss. Admin. Code Pt. 2, R. 103 Rule 103

The Department may revoke or suspend the processors permit for violation of any of the Local Option laws or rules and regulations by the permittee or any agent, employee, associate, or representative of the permittee.

35 Miss. Admin. Code Pt. 2, R. 104 (Reserved) Chapter 17 Calculation of Permit Fees

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

Applicants are required to pay the applicable privilege license tax listed in Miss. Code Section 27-71-5 prior to the issuance of a permit.

35 Miss. Admin. Code Pt. 2, R. 101 Rule 101

If the amount of a privilege tax is determined by annual production volumes, a permittee will state within its application or renewal its projected production and pay the corresponding privilege license tax. Thereafter, the permittee will submit a report through TAP at the end of each month stating the gallonage it produced during that month. If a monthly output results in the permittee producing more aggregately for the year than it projected on its application, the Department will assess the permittee the applicable license tax increase during the year should the increased output result in an increased tax. If at the end of the permit period a permittee has produced less than originally estimated resulting in any overpayment, it may seek a refund if applicable. A permit will not be renewed until all outstanding privilege license taxes are paid in full and all other renewal requirements are met.

35 Miss. Admin. Code Pt. 2, R. 102 Rule 102

This calculation monthly report and assessment procedure will be applicable to determining the privilege license tax for all alcoholic beverage permits which are based on production, including, but not limited to, native wineries, native distilleries, and Class 1 manufacturers permits.

35 Miss. Admin. Code Pt. 2, R. 103 (Reserved)

35.II.3.17 effective August 2, 2021

Subpart 4 Warehouse Operations

Chapter 1 Disposition of Inventory When Permit is Revoked, or Not Reissued, or When Counties Vote to Go Back Under Prohibition Laws

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

Inventory held by a permit holder must be disposed of when: 1. The permit expires and the permittee has made no application for renewal; 2. The Department has refused to reissue the permit; 3. The permit has been revoked by the Department; 4. There has been a death or physical or mental disability of the permit holder 5. The permit holder desires to discontinue the business prior to the expiration of the permit; or 6. The county or judicial district where the permit holder is located has voted to go back under the prohibition laws.

35 Miss. Admin. Code Pt. 2, R. 101 Rule 101

The permittee shall be given a period of sixty (60) days after the expiration or revocation of the permit within which to make a sale of the alcoholic beverages on hand to another permittee, and if a purchaser is found , the permittee shall comply strictly with the following procedures before making any sale of his stock of goods: 1. A written request shall be submitted to the Director along with a complete and detailed inventory of all merchandise on hand. 2. The request shall be signed by the holder of the permit who desires to sell the merchandise and by the permit holder who desires to purchase the merchandise. No sale shall be made except to a retail establishment which has been duly licensed by the Alcoholic Beverage Control. 3. Sales or commitments to sell or purchase alcoholic beverages under the provisions of this regulation shall be made subject to the written approval of the Alcoholic Beverage Control Division. 4. If the prospective purchaser is an on-premise retailer permittee and the Director approves the purchase pursuant to Miss. Code Ann. Section 27-71-5, the current wholesale value of the alcoholic beverages purchased shall be recorded just as any regular purchase of alcoholic beverages from the LDC Warehouse on the permittee’s purchase records.

35 Miss. Admin. Code Pt. 2, R. 102 Rule 102

The Division may at its discretion take possession of any and all alcoholic beverages remaining in stock of the permittee and a refund shall be made to the permittee at the current wholesale price. A charge for handling and transporting the product to the LDC Warehouse will be deducted from the refund. All permit fees paid by the permittee shall be forfeited. Such alcoholic beverages shall be placed in the Alcoholic Beverage Control Division inventory and sold in the regular course of business.

35 Miss. Admin. Code Pt. 2, R. 103 Rule 103

Permit holders desiring to discontinue business prior to expiration of the alcoholic beverage permits shall surrender their permits for cancellation.

35 Miss. Admin. Code Pt. 2, R. 104 Rule 104

Permit holders who desire to return their stock to the LDC warehouse may do so at the discretion of the Director pursuant to the procedures outlined in paragraph 101 above. Requests to return alcoholic beverages to another permittee must also be approved by the Director.

35 Miss. Admin. Code Pt. 2, R. 105 Rule 105

No credit of merchandise returned to the LDC Warehouse shall be given under this Chapter for purchases of delisted items, novelty items contained in dual packaged products, holiday packages, special orders or items not saleable. Such special merchandise shall not be redeemed by the Division under any circumstances. All redeemed inventory will be placed in the ABC inventory.

35 Miss. Admin. Code Pt. 2, R. 106 (Reserved)

Chapter 02 Uniform Prices

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

Alcoholic beverages will be sold by the Alcoholic Beverage Control Division at uniform prices throughout the state. Prices of alcoholic beverages as published are f.o.b. retailer and contain all taxes with the exception of the Mississippi sales tax. Mississippi sales tax will be computed on the total invoice price and added to each purchase.

35 Miss. Admin. Code Pt. 2, R. 101 (Reserved)

Chapter 03 Payment

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

All payments for orders or alcoholic beverages must be made by cash, credit card, bank check, cashier's check, ACH Debit, post office money order or express money order. Permittees must send payment with their written orders on forms supplied by the Division be authorized for ACH Debit status or payment via credit card.

35 Miss. Admin. Code Pt. 2, R. 101 Rule 101

The Division will draft the permittee's bank account for the amount of each invoice if the proper authorization is received by the Division from the permittee and the permittee's bank.

35 Miss. Admin. Code Pt. 2, R. 102 Rule 102

If payment is dishonored or insufficient after a permittee has received an order on which payment was made, the Department will temporarily discontinue sales of alcoholic beverages until such time as payment is received.

35 Miss. Admin. Code Pt. 2, R. 103 (Reserved)

Chapter 04 Split Cases

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

A number of selected items will be subject to split case sales. These items will be noted on the price lists published by the Alcoholic Beverage Control Division. Less than full cases of alcoholic beverages can be sold by the Alcoholic Beverage Control Division to permittees. The current price list will contain instructions for ordering split cases.

35 Miss. Admin. Code Pt. 2, R. 101 (Reserved)

Chapter 05 Special Order Procedures

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

All products must have an approval from the Department before a company or an agent may make any sales or take any orders for such products. All requests must be submitted in writing to the Director and substantiated by facts and figures regarding prices, specifications, alcohol content and other relevant information requested. A sample or picture of the actual beverage container and label must also be provided for review.

35 Miss. Admin. Code Pt. 2, R. 101 Rule 101

Special orders for any and all types of alcoholic beverages not currently listed on ABC’s price list and not prohibited by Title 35, Part II, Subpart 2, Chapter 5 of the Mississippi Administrative Code may be placed by package retailer or on-premises permittees in case lots only.

35 Miss. Admin. Code Pt. 2, R. 102 Rule 102

Special orders received by the Alcoholic Beverage Control Division will be processed as promptly as feasible.

35 Miss. Admin. Code Pt. 2, R. 103 Rule 103

The Division will obtain the prices from the supplier and use the regular pricing formula in arriving at wholesale prices to be submitted to the permit holder. Upon receipt of the quotation, the permit holder may place an order with the Division and shall remit funds to cover the entire cost.

35 Miss. Admin. Code Pt. 2, R. 104 Rule 104

In addition, the provisions of Title 35, Part II, Subpart 4, Chapter 1 of the Mississippi Administrative Code dealing with the return of merchandise by permittees shall not apply to special order merchandise. Any special order merchandise shall be redeemed only as dry concealed damage as set forth in the Alcoholic Beverage Control Price List Book.

35 Miss. Admin. Code Pt. 2, R. 105 Rule 105

All special orders must be labeled properly and in accordance with industry standards. If the LDC Warehouse labels the product, a fee will be charged.

35 Miss. Admin. Code Pt. 2, R. 106 (Reserved)

Chapter 06 Importers’, Vintners’, and Distillers’ Warehouses

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

Importers, vintners and distillers may warehouse and store alcoholic beverages in private bonded warehouses in Mississippi for the ultimate use and benefit of the Department of Revenue by obtaining prior approval from the Department. Bonded warehouses may be owned or operated by any entity which posts the required bond as provided in Paragraph 102 below.

35 Miss. Admin. Code Pt. 2, R. 101 Rule 101

All alcoholic beverages shipped into this state for storage in a private bonded warehouse must have the proper Mississippi ABC item code label affixed to each case. No withdrawal from inventory shall be permitted from a private bonded warehouse for shipment outside of the State of Mississippi unless special permission is obtained from the Director.

35 Miss. Admin. Code Pt. 2, R. 102 Rule 102

Before any entity shall engage in warehousing and storage, a ten thousand dollar ($10,000.00) bond must be tendered to and approved by the Division, thereby insuring that the entity will strictly comply with all laws, rules and regulations of the State, and shall pay all taxes due the State of Mississippi.

35 Miss. Admin. Code Pt. 2, R. 103 Rule 103

Shipments from a private bonded warehouse to the LDC Warehouse must be by common carrier unless prior written approval of an alternate shipper is obtained in writing from the Director. All shipments to the LDC Warehouse must be accompanied by a standard bill of lading with the following additional information: the number of cases shipped, a description of the product(s) shipped, and the Mississippi ABC item code for the product(s) shipped. Cases shipped from a private bonded warehouse to the LDC Warehouse will be inspected and refused if the shipment contains unlabeled/uncoded cases, damaged cases, or mis-shipped cases.

35 Miss. Admin. Code Pt. 2, R. 104 Rule 104

Shipments from a private bonded warehouse to the LDC Warehouse will be limited to one day per week, to be designated by the Division.

35 Miss. Admin. Code Pt. 2, R. 105 Rule 105

No alcoholic beverage samples shall be shipped into, stored, or shipped out of a private bonded warehouse.

35 Miss. Admin. Code Pt. 2, R. 106 Rule 106

Each private bonded warehouse shall store its inventory of alcoholic beverages in an area so designated by the warehouse for alcoholic beverages, and shall maintain the inventory in a saleable condition at all times. The alcoholic beverages shall not be interspersed with other goods stored in the private bonded warehouse.

35 Miss. Admin. Code Pt. 2, R. 107 Rule 107

The private bonded warehouse’s alcoholic beverage records and alcoholic beverage inventory shall be open for examination at any time. Failure to keep up-to-date, accurate inventory and

shipment records or to allow examination of the records or the inventory shall subject the warehouse to the immediate suspension of its rights to ship to the LDC Warehouse.

35 Miss. Admin. Code Pt. 2, R. 108 Rule 108

All theft of alcoholic beverages must be immediately reported to the local authorities and to the Division.

35 Miss. Admin. Code Pt. 2, R. 109 Rule 109

An inventory, certified by the bonded warehouseman with whom such alcoholic beverages are stored, shall be furnished to the Department within five (5) days after the close of business at the end of each calendar month.

35 Miss. Admin. Code Pt. 2, R. 110 (Reserved)

Chapter 07 Procedure for Listing Alcoholic Beverage Items

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

New listings will be considered every other month by the Department. In order for a product to be considered for listing, it must have met or exceeded a rolling twelve (12) month sales revenue formula as set forth by the Division. The manufacturer must also be in compliance with the inventory management guidelines as set forth by the Division.

35 Miss. Admin. Code Pt. 2, R. 101 Rule 101

In addition, the Department retains full discretion to list or not list any product. Each company or agent shall submit to the Division the new items it wishes to list.

35 Miss. Admin. Code Pt. 2, R. 102 Rule 102

Products must be quoted in case units as provided by the manufacturer. Strapping or taping cases together or subdividing cases into units other than the manufacturer’s original case unit is prohibited. Once approved, products shall be shipped to the LDC Warehouse in original case units as provided by the manufacturer.

35 Miss. Admin. Code Pt. 2, R. 103 Rule 103

Unique products or classes of products may, at the discretion of the Division, be separated from the wine or spirit categories and given its own minimum revenue and case sales requirements as circumstances dictate.

35 Miss. Admin. Code Pt. 2, R. 104 Rule 104

The total revenue from sales shall equal the case cost, at wholesale, multiplied by the number of cases sold during the rolling twelve (12) month period. This formula is based on cases actually sold to permittees and not based on cases ordered. Cases which are ordered by permittees but not sold due to the fact that the product ordered is out of stock or for any other reason will not be considered in the application of the formula.

35 Miss. Admin. Code Pt. 2, R. 105 Rule 105

Furthermore, any special order item that meets or exceeds the rolling twelve (12) month sales revenue formula may, at the Department’s discretion, be placed in the Division’s Price List.

35 Miss. Admin. Code Pt. 2, R. 106 Rule 106

One-of-a-kind and holiday items are exempt from the quota requirements. No holiday item shall contain cash, coupons, rebates, or any items subject to spoilage.

35 Miss. Admin. Code Pt. 2, R. 107 Rule 107

Price changes will be considered four (4) times each year and will become effective on the following dates: February 1, May 1, August 1, and November 1. All price change requests must be placed with the Division at least 60 days prior to the requested effective date.

35 Miss. Admin. Code Pt. 2, R. 108 Rule 108

Each bottle of native wine shall have clearly imprinted on the label the words Mississippi Native Wine.

35 Miss. Admin. Code Pt. 2, R. 109 (Reserved)

35.II.4.07 revised effective December 1, 2019

Chapter 08 Procedure for Delisting or Deleting Alcoholic Beverages

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

Any items on the Division’s price list will be delisted for failure to meet the current sales revenue formula prescribed by the Division; however, the Department may, in its discretion, continue to maintain an item in its price list that does not meet the minimum revenue standard. Furthermore, the Department reserves the right to delist any item for violation of any law or regulation or when, in its opinion, the best interest of the Division may be served.

35 Miss. Admin. Code Pt. 2, R. 101 Rule 101

The storage of items at the LDC Warehouse is strictly a voluntary act by its owner(s). The Department retains the right to regulate the location of all items placed in bailment. Manufacturers shall manage the inventory of items stored in the LDC Warehouse in compliance with the parameters as set forth by the Division. Manufacturers who do not comply with the guidelines as set forth, may, at the discretion of the Division, be stopped from listing new products and special purchase allowances. Failure of a company to stock a bailment item after the effective date of the price list may result in the delisting of the item.

35 Miss. Admin. Code Pt. 2, R. 102 Rule 102

Any bailment item voluntarily removed by the company, or delisted by the Department, shall be removed from the State at the direction of the Department. Delisted items must be removed from bailment within thirty (30) days from the date of delisting. Any item delisted will not be eligible for re-listing for a minimum of one (1) listing period. Delisted items may, subject to Department approval, be offered as a special order item pursuant to Title 35, Part II, Subpart 4, Chapter 5 of the Mississippi Administrative Code.

35 Miss. Admin. Code Pt. 2, R. 103 Rule 103

All products remaining after the thirty (30) day period shall become the property of the Division for disposition as it sees fit.

35 Miss. Admin. Code Pt. 2, R. 104 (Reserved)

35.II.4.08 revised effective December 1, 2019

Chapter 09 Dual Packaging

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

The holder of a manufacturer’s or solicitor’s permit may submit to the Division certain unit packages consisting of a specialty or novelty item and an alcoholic beverage previously listed with the Division for sale in retailer package stores. Novelty items include, but are not limited to: T-shirts, sportswear, glassware, stoneware, flags, and banners. However, goods subject to spoilage will not be permitted. All products containing dual packaged items must have prior approval of the Division.

35 Miss. Admin. Code Pt. 2, R. 101 Rule 101

The unit packages shall be assembled prior to shipment to the LDC warehouse and shall be contained in sealed packages. Novelties may not be sold separately but must be sold as a unit in

one original, unopened package. Dual package items will not be sold in split cases. The Division will not be responsible for damaged or defective dual packaged products other than alcoholic beverages.

35 Miss. Admin. Code Pt. 2, R. 102 Rule 102

A Manufacturer or its representative may place a 50 mL alcohol product on the neck of a bottle of another alcohol product in a package store. The 50 mL alcohol product must be a new product and must come through the Liquor Distribution Center and picked up by a broker for distribution. The LDC must receive authorization from the manufacturer which states the product and specific quantity to be removed by the broker for distribution before it may be used in this manner.

35 Miss. Admin. Code Pt. 2, R. 103 (Reserved)

Chapter 10 Bailment Procedures - Policies and Procedures of Mississippi Alcoholic Beverage Control Bailment Warehouse System

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

Mississippi uses the bailment system for operations of the LDC Warehouse. When bailment is used, there will be a bailment agreement between the Division and the vendor. Under the bailment system, ABC inventory is used first; when the ABC inventory is insufficient, the vendor’s inventory will be utilized.

35 Miss. Admin. Code Pt. 2, R. 101 Rule 101

All bailment alcoholic beverages received by the Division will be stored at the Liquor Distribution Center Warehouse. The Division will determine the location of all alcoholic beverages stored in the LDC Warehouse. The Division reserves the right to manage warehouse space allocation.

35 Miss. Admin. Code Pt. 2, R. 102 (Reserved)

35 Miss. Admin. Code Pt. 2, R. 200 Rule 200

Vendors will own and control the stock that enters the LDC Warehouse. The Division will take physical inventory on a continuous cycle counting basis. Any irreconcilable discrepancies will be resolved as follows: 1. The Division will pay the vendor for the product in cases of physical shortage of the vendor’s product. 2. The Division will place any surplus into its own inventory in cases of physical overage of the vendor’s product.

35 Miss. Admin. Code Pt. 2, R. 201 Rule 201

Vendors may conduct their own physical inventory of stock held in bailment by arrangement with the Division at least 48 hours in advance. Vendors or their agents should bring discrepancies to the attention of the Division.

35 Miss. Admin. Code Pt. 2, R. 202 Rule 202

The Division will routinely authorize the product into the distribution center for restocking purposes.

35 Miss. Admin. Code Pt. 2, R. 203 Rule 203

The Division will require that vendors designate an agent who will be responsible for approving stock withdrawal. A Mississippi Bailment Warehouse Vendor’s Authorization Representative Form should be completed for each authorized agent. Vendors must update this document as needed.

35 Miss. Admin. Code Pt. 2, R. 204 Rule 204

The Division will notify the vendor’s agent during the last week of each month of their intention to purchase specified inventory belonging to the vendor based on anticipated needs for the following month. If the vendor does not respond within two (2) hours after receipt of the notification, the vendor will be deemed to have authorized the anticipated purchase. This report shows the maximum anticipated purchases. Actual purchases may differ due to the availability of the vendor’s product on the date the inventory was picked, the availability of new receipts into the LDC Warehouse, and the availability of ABC owned inventory which will be removed first.

35 Miss. Admin. Code Pt. 2, R. 205 Rule 205

Vendors shall comply with the inventory management guidelines as set for by the Division. Vendors who do not comply, may, at the discretion of the Division, be stopped from listing new products and/or offering special purchase allowances.

35 Miss. Admin. Code Pt. 2, R. 206 Rule 206

The receipt of bailment merchandise is according to the following terms and conditions. 1. Receiving into the bailment-warehousing systems will take place at the LDC Warehouse. 2. Product will not be unloaded if it is not shipped on pallets or slip-sheets. Pallets are the preferred method for delivery; therefore, there will be a charge for the use of slip-sheets 3. Vendors are required to supply LDC Warehouse personnel with a Bill of Lading or Packing List at delivery which must include the control state code, the description and name of the product, and the quantity of the product being delivered to the LDC Warehouse. 4. The vendor will be responsible for obtaining the freight carrier. 5. The carrier is required to call the LDC Warehouse to obtain an unloading appointment time. The carrier must indicate the vendor when scheduling the appointment. 6. The Division will complete a Receiving Report form for each load delivered. The case quantity shown on the form will reflect any overage or shortage compared to the Bill of Lading or Packing List supplied by the carrier. 7. LDC Warehouse personnel will unload all products. Carrier drivers are required to witness the unloading. The driver and Division representative will sign the unloading report form and the Bill of Lading or Packing List. 8. If the Division discovers an error in the receiving process, the Division will complete an Inventory Correction form which will be attached to the original receiving report.

35 Miss. Admin. Code Pt. 2, R. 207 Rule 207

Because the Division may purchase damaged goods and subsequently establish a receivable with the vendor, the LDC Warehouse Operations Manager will be responsible for determining whether damaged goods are to be received into the bailment inventory. The Division will always attempt to resolve any problems in this area to the mutual satisfaction of the vendor and the Division.

35 Miss. Admin. Code Pt. 2, R. 208 Rule 208

The Division believes that it is advantageous to the vendor and the Division to accept merchandise with small amounts of damage which has occurred during the shipping process. At the discretion of the LDC Warehouse Operations Manager, goods with slight damage will be received into the Division inventory and placed in the repack area. The Division will purchase the damaged bottle(s) and file a claim against the vendor for recovery of the damaged bottle’s purchase price.

35 Miss. Admin. Code Pt. 2, R. 209 Rule 209

When the Division discovers substantial damage, the truck will be sealed and the vendor notified. The vendor or designated agent will be responsible for determining how the damaged goods are to be handled. The Division will assist the vendor in substantiating the degree of

damage, but the vendor is responsible for filing a claim against the carrier. No goods from the damaged shipment will be received into the LDC Warehouse until the LDC Warehouse Operations Manager is satisfied with the vendor’s determination.

35 Miss. Admin. Code Pt. 2, R. 210 Rule 210

All products are owned by the vendor. It will be the responsibility of the vendor to file claims with the carrier to recover the cost of damages which occurred during the transportation of the alcoholic beverages.

35 Miss. Admin. Code Pt. 2, R. 211 Rule 211

Vendor’s agents may obtain a report from the NABCA showing the activity of their products.

35 Miss. Admin. Code Pt. 2, R. 212 (Reserved)

35 Miss. Admin. Code Pt. 2, R. 300 Rule 300

Vendors may withdraw product from bailment; however, for the purposes of warehouse administration, all removals must be approved 24 hours in advance of removal and will occur during normal LDC Warehouse receiving hours. The vendor must provide in writing the item code, name, description, and quantity of the product being removed, as well as the motor carrier picking up the product from the LDC Warehouse and the product destination. The division will load the product onto the truck. The carrier’s driver will observe the loading. Both the Division representative and the driver must sign the Bill of Lading and a copy of the document will be provided to the vendor. The Division will adjust the bailment inventory records and will charge the vendor a handling fee to cover the cost of the requested withdrawal.

35 Miss. Admin. Code Pt. 2, R. 301 (Reserved)

35 Miss. Admin. Code Pt. 2, R. 400 Rule 400

The Division will charge for certain services. Charges may include, but will not be limited to, the following services: 1. Labeling 2. Re-packing 3. Damage Re-packing 4. Reloading for shipping 5. Split case handling 6. Bailment fees 7. Unloading product received on slip-sheets

35 Miss. Admin. Code Pt. 2, R. 401 Vendors must comply with Federal laws, guidelines, and regulations

35 Miss. Admin. Code Pt. 2, R. 402 Rule 402

Prior to using the LDC Warehouse, each vendor will be required to execute the bailment agreement and designate an agent.

35 Miss. Admin. Code Pt. 2, R. 403 Rule 403

The Division will not carry insurance on the vendor’s inventory in bailment nor be responsible for any loss. Vendor’s agents will be provided inventory reports to assist vendors in determining the value of their inventory. This report may be obtained from the NABCA.

35 Miss. Admin. Code Pt. 2, R. 404 Rule 404

Claims by vendor must be presented in writing to the Division within thirty (30) days after vendor’s claim arises.

35 Miss. Admin. Code Pt. 2, R. 405 Rule 405

The Division may submit to the vendor and/or the vendor’s agent, or may require the vendor or vendor’s agent to submit to the Division, other documents necessary to conduct its operations.

35 Miss. Admin. Code Pt. 2, R. 406 (Reserved)

Chapter 11 Retail Pickup from Craft Distilleries, Native Distilleries, and Native Wineries

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

Mississippi Code Section 67-1-41(10) allows retail permittees to pick up native wines and spirits sold by the Department, so that those alcoholic beverages may be delivered to the retail permittee at the craft distillery, native distillery, or native winery instead of via shipment from the LDC. All orders for such products must be placed through the LDC utilizing TAP. 101 Retail permittees may pick up alcoholic beverages directly from a craft distillery, native distillery, or native winery after first notifying the LDC. Such alcoholic beverages must be listed by the LDC to be eligible for direct pick up. 102 Retail permittees shall notify the LDC via electronic mail at retail.pickup@dor.ms.gov, prior to the order being picked up, that it intends on picking up these products from the craft distillery, native distillery, or native winery. 103 Retail permittees shall abide by all restrictions on transporting alcoholic beverages, including but not limited to those as stated under Mississippi Code Section 27-71-15 (Means of Transportation). 104 (Reserved) 35.II.4.11 revised effective March 9, 2026

Subpart 05 Native Wine

Chapter 01 Applicant Requirements

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

Prior to obtaining a permit, native wine applicants must satisfy the department that they meet the requirements of Miss. Code Ann. Section 67-1-57.

35 Miss. Admin. Code Pt. 2, R. 101 Rule 101

No person holding any permit issued under the provisions of this chapter shall engage in any business or activity authorized by such permit unless such person shall qualify so to do by complying with all statutes of the United States of America, and all regulations issued pursuant thereto, which are applicable or shall pertain to such business or activity, and shall continue to be so qualified at all times while engaging in such business or activity. As a prerequisite to the issuance of any permit under this chapter, the applicant shall first obtain the required federal occupational stamp for the type of business for which the permit has been applied.

35 Miss. Admin. Code Pt. 2, R. 102 Rule 102

Failure of a permittee to maintain the qualifications necessary for the issuance of a permit, including failure to pay any taxes due the State, may result in the revocation or suspension of a permit.

35 Miss. Admin. Code Pt. 2, R. 103 (Reserved)

Chapter 02 Production

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

In order to be classified as a Mississippi native wine at least 51% of the finished product by volume shall have been obtained from grapes or other sources produced in Mississippi and defined in Miss. Code Ann. Section 67-5-5.

35 Miss. Admin. Code Pt. 2, R. 101 Rule 101

A holder of a Class 3 Native Wine Manufacturer’s Permit shall be allowed to import bulk and/or fortified wines into this state for use in blending with native wines. In addition, permit holders shall make available to the Department or its representatives all records required by the Federal Government, showing the volume of bulk and/or fortified wines imported for blending or fortifying purposes. The Department shall satisfy itself that the volume of the wines imported does not exceed the volume the permit holder would reasonably be expected to produce from grapes planted in his vineyard, taking into consideration that fifty-one percent (51%) of the wine must be produced from grapes, fruits, berries, honey or vegetables grown and produced in Mississippi.

35 Miss. Admin. Code Pt. 2, R. 102 Rule 102

Persons holding a Class 3 Native Wine Manufacturer’s (Producer’s) Permit issued pursuant to Miss. Code Ann. Section 67-1-51 shall be required to have the words Mississippi Native Wine clearly printed on the label of each bottle.

35 Miss. Admin. Code Pt. 2, R. 103 Rule 103

All native wines produced under permits issued pursuant to Miss. Code Ann. Section 67-1-51 shall be produced in accordance with the sanitary codes and production standards required by applicable federal statutes and regulations of the Alcohol and Tobacco Tax and Trade Bureau and the Food and Drug Administration of the United States Government.

35 Miss. Admin. Code Pt. 2, R. 104 (Reserved)

Chapter 03 Taxation

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

Permittees shall pay the annual tax levied pursuant to Miss. Code Ann. Section 27-71-5 on all wine produced in a given year.

35 Miss. Admin. Code Pt. 2, R. 101 Rule 101

Permittees shall pay the tax levied pursuant to Miss. Code Ann. Section 27-71-7 on all wine sold in a given year unless that wine is sold for export and sale outside this State or if the wine is given away as free samples pursuant to Miss. Code Ann. Section 67-5-13. This tax shall be remitted monthly.

35 Miss. Admin. Code Pt. 2, R. 102 Rule 102

Permittees must provide electronic statements to the Department each month showing: 1. All sales made to consumers at the native winery or in its vicinity; 2. The gallonage produced during the month; and 3. Gallonage sold or exported for sale during the month.

35 Miss. Admin. Code Pt. 2, R. 103 Rule 103

Permittees who import bulk or fortified wines from outside this State to be mixed with native wines shall not pay any excise tax on the imported wine.

35 Miss. Admin. Code Pt. 2, R. 104 (Reserved)

Chapter 04 Retail Operations

35 Miss. Admin. Code Pt. 2, R. 100 Rule 100

A permit shall not be denied based solely on the fact that the proposed winery is located in a county which is considered dry under Miss. Code Ann. Section 67-1-1 et. seq.

35 Miss. Admin. Code Pt. 2, R. 101 Rule 101

A native winery may make sales to consumers at the location of the winery or in its general vicinity. The location of said sales must be pre-approved by the Department.

35 Miss. Admin. Code Pt. 2, R. 102 Rule 102

Sales made to consumers shall be for either on-premise or off-premise consumption.

35 Miss. Admin. Code Pt. 2, R. 103 Rule 103

Native wine retailers may make sales of native wines during the same hours as that allowed for package retailers. Provided, however, the governing body of any location may petition the Department to permit sales by native wine retailers located within their jurisdiction at other times. Upon receipt of a petition, or upon its own motion, the Department shall consider the same and set whatever hours of sale it deems appropriate. A certified copy of the resolution of the governing authority requesting permission must accompany all such petitions.

35 Miss. Admin. Code Pt. 2, R. 104 Rule 104

Native wineries shall not make direct sales to Mississippi alcoholic beverage permittees.

35 Miss. Admin. Code Pt. 2, R. 105 Native wines may be possessed and consumed throughout the State

35 Miss. Admin. Code Pt. 2, R. 106 (Reserved)

Part 3 Income and Franchise

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

“Gross income” means all income from whatever source derived, unless excluded by law and includes income realized in any form, whether in money, property or services. Gross income includes compensation for personal and professional services, wages, fees, business income, profits from sales, rentals and dealings in property, interest, dividends and gains, profits and income derived from any source whatever, including income from governmental agencies and subdivisions thereof, annuities, reacquired property, securities, insurance premiums, reinsurance premiums, considerations for supplemental insurance contracts, transactions of any business carried on within the state for gain or profit, income from intangibles if such property has acquired a business, commercial or actual situs in this state, a partner's distributive share of partnership gross income, income in respect of a decedent, and income from an interest in an estate or trust unless exempt or otherwise excluded, in whole or in part, from tax by law. Gross income, however, is not limited to the items so enumerated. In the case of a taxpayer reporting net income under this act on a basis of receipts and disbursements, there should be included in gross income only actual and constructive receipts of income. Taxpayers reporting on the accrual basis must include in gross income amounts received by them or accrued to them.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

In a manufacturing, merchandising or mining business, "gross income" means the total sales, less the cost of goods sold, plus any income from investments and from incidental or outside operations or sources.

35 Miss. Admin. Code Pt. 3, R. 102 Rule 102

“Net income” means gross income less allowable business expenses. The business deductions are in general, though not exclusively, expenditures, other than capital expenditures, in connection with the production of income.

35 Miss. Admin. Code Pt. 3, R. 103 Rule 103

“Taxable income” with respect to individuals, estates and trusts, means total gross income less allowable expenses incurred in connection with the taxpayer's trade or business, allowable personal deductions and applicable personal and additional exemptions. Taxable income with respect to corporations, associations and partnerships, means total gross income less allowable expenses and contributions.

35 Miss. Admin. Code Pt. 3, R. 104 Rule 104

“Domestic taxpayer”, when applied to any corporation, association, and partnerships, means created, organized or domesticated under the laws of the State of Mississippi. The fact that a domestic taxpayer moves its principal place of business without the state does not preclude its classification as a domestic organization for income tax purposes.

35 Miss. Admin. Code Pt. 3, R. 105 Rule 105

“Foreign taxpayer”, when applied to any corporation or association, including partnerships, means created or organized under the laws of a state other than Mississippi. The fact that a foreign taxpayer carries on its business or occupation in Mississippi does not set aside the foreign construction of the corporation, association or partnership.

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35 Miss. Admin. Code Pt. 3, R. 106 Rule 106

The term "farm" embraces the farm in the ordinary accepted sense, and includes, but is not limited to stock, dairy, poultry, fish, fruit and truck farms; also plantations, and all land used for farming operations. All individuals, partnerships or corporations that cultivate, operate or manage farms for gain or profit, either as owners or tenants, are designated as farmers. A fish farm is an area where fish are grown or raised, as opposed to merely caught or harvested; that is, an area where they are artificially fed, protected, cared for, etc.

35 Miss. Admin. Code Pt. 3, R. 107 Rule 107

A taxpayer is engaged in the “business of farming” if he cultivates, operates or manages a farm for gain or profit, either as owner or tenant. A taxpayer who receives a rental (either in cash or in kind) which is based upon farm production is engaged in the business of farming. However, a taxpayer who receives a fixed rental (without reference to production) is engaged in the business of farming only if he participates to a material extent in the operation or management of the farm. A person cultivating or operating a farm for hobby, recreation or pleasure rather than a profit is not engaged in the business of farming.

35 Miss. Admin. Code Pt. 3, R. 108 (Reserved)

35.III.1.01 revised effective January 7, 2019

Chapter 02 Accounting Periods

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

Every taxpayer must compute taxable income based on their tax year. A tax year is an annual accounting period used by the taxpayer for keeping records and reporting income and expenses. A tax year may be a calendar year, which is a period of twelve (12) consecutive months ending on December 31 st , or a fiscal year, which is a period of twelve (12) consecutive months ending on the last day of any month except December 31 st .

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

Miss. Code Ann Section 27-7-13(4) provides that if a taxpayer’s annual accounting period is not a proper fiscal year ending or if the taxpayer has no annual accounting period or does not maintain books and records that identify an accounting period, that the taxable period will be based on a calendar year.

35 Miss. Admin. Code Pt. 3, R. 102 Rule 102

S Corporations, fiduciaries and partnerships are required to file for the same period for Mississippi as for federal purposes.

35 Miss. Admin. Code Pt. 3, R. 103 Rule 103

Taxpayers required to file an individual income tax return will file using a calendar year tax period unless they have been granted permission by the Commissioner to file otherwise.

35 Miss. Admin. Code Pt. 3, R. 104 Rule 104

Pursuant to Miss. Code Ann. Section 27-7-43 a taxpayer will only be allowed to change an accounting period when it has received approval from the Commissioner. If permission is granted by the federal government to change the accounting period, then state permission is automatic provided the taxpayer attaches a copy of the written federal approval to the first state return filed for the new period. If the Commissioner determines that such change in accounting period results in an understatement of income, the Commissioner will deny the final approval.

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35 Miss. Admin. Code Pt. 3, R. 105 Rule 105

When the accounting period is changed, it is required that the tax on the first return be computed by placing the income on an annual basis. The annualized income is determined by dividing the income for the period by the number of months in the short period and multiplying the result by twelve (12). The tax computed on the annualized taxable income is multiplied by the number of months in the short period and divided by twelve (12).

35 Miss. Admin. Code Pt. 3, R. 106 (Reserved)

35.III.1.02 revised effective January 7, 2019

Chapter 03 Accounting Basis

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

Basis of accounting refers to the methodology under which income and expenses are recognized in financial statements and records. Every taxpayer must use a consistent accounting method to report income and expenses. The manner by which a taxpayer computes the amount of income, gains, losses, deductions and credits, and the tax year for which each item must be reported, constitutes the taxpayer’s tax accounting method. The most commonly used accounting methods are the cash basis and the accrual basis.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

The cash basis (cash receipts and disbursements) is the accounting method used by most individuals. Income is generally reported in the year that it is actually or constructively received in the form of cash, or its equivalent, or other property. Deductions or credits are generally taken for the year in which the related expenditures are actually paid, unless they should be taken in a different period to more clearly reflect income, such as depreciation allowances and prepaid expenses.

35 Miss. Admin. Code Pt. 3, R. 102 Rule 102

Bad debts do not constitute a loss as such under the cash receipts and disbursements method. The expenses, liabilities or credits of one year cannot be used to reduce the income of a subsequent year.

35 Miss. Admin. Code Pt. 3, R. 103 Rule 103

The accrual basis is the accounting method that records revenues and expenses when they are incurred, regardless of when cash is exchanged. Expense are deductible on the accrual basis in the year incurred, regardless of when payment is made. The purpose of an accrual method is to match income and expenses in the correct year.

35 Miss. Admin. Code Pt. 3, R. 104 Rule 104

The net income shall be determined in accordance with the accounting basis employed by the taxpayer, whether it be a fiscal year or a calendar year and in accordance with the method of accounting employed whether it be cash or accrual. The accounting method used by a taxpayer must clearly reflect income and expenses. The taxpayer’s method of accounting must be consistent; no method of accounting is regarded as clearly reflecting income unless all items of gross profit and deduction are treated with consistency from year to year.

35 Miss. Admin. Code Pt. 3, R. 105 Rule 105

The initial return may be filed in accordance with the basis and method elected by the taxpayer as long as it is in keeping with generally accepted principles, is in accordance with the basis and method of accounting regularly used by the taxpayer, and reflects the

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taxpayer's correct income. Arbitrary changes in the basis or method of accounting employed by the taxpayer are not permitted except in cases where such changes have been approved in advance by the Commissioner.

35 Miss. Admin. Code Pt. 3, R. 106 Rule 106

Where no accounting basis has been established by the taxpayer, or where the method employed does not clearly reflect income, the Commissioner shall prescribe a method that will clearly reflect income, and the taxpayer for whom the method is prescribed shall be bound by the same until such time as it is shown to the satisfaction of the Commissioner that a method proposed by the taxpayer will reflect such income with equal results.

35 Miss. Admin. Code Pt. 3, R. 107 Rule 107

The expenses, liabilities or credits of one year cannot be used to reduce the income of a subsequent year. If a taxpayer does not within any year properly deduct their expenses, losses, interest, taxes or other charges, they cannot deduct them from the income of the next or any succeeding year.

35 Miss. Admin. Code Pt. 3, R. 108 (Reserved)

35.III.1.03 revised January 7, 2018

Chapter 04 Inventories

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

The Commissioner will follow Federal Rules, Regulations and Revenue Procedures relating to inventories as are not deemed contrary to the context and intent of Mississippi Law.

35 Miss. Admin. Code Pt. 3, R. 101 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 102 (Reserved)

Chapter 05 Hobby Losses 100 The Commissioner will follow Federal Rules, Regulations and Revenue Procedures relating to Hobby Losses as are not deemed contrary to the context and intent of Mississippi Law.

35 Miss. Admin. Code Pt. 3, R. 101 (Reserved)

35.III.1.05 revised effective January 7, 2019

Chapter 06 Reserved

35.III.1.06 revised effective January 7, 2019

Chapter 07 Reserved

35.III.1.07 revised January 7, 2019

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Chapter 08 Contractors

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

The Commissioner will follow federal rules, regulations and revenue procedures relating to Contractors as are not deemed contrary to the context and intent of Mississippi Law.

35 Miss. Admin. Code Pt. 3, R. 101 (Reserved)

35.III.1.08 revised effective January 7, 2019

Chapter 09 Income Averaging

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

Mississippi law does not authorize income averaging for taxpayers having annual fluctuations in income over several years. Income earned, realized or recognized in the taxable year must be reported in full for that year without the benefit of any method of averaging.

35 Miss. Admin. Code Pt. 3, R. 101 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 102 (Reserved)

Chapter 10 Statute of Limitations

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

The Commissioner, pursuant to Miss. Code Ann. Section 27-7-49 has three (3) years from the due date of the return or the date the return was filed, whichever is later, to make a determination of tax overpayment or deficiency. Exceptions to this general rule are: 1. Where a taxpayer has been notified by certified mail prior to the expiration of the three-year examination period that his or her return is being examined. The Commissioner has one year after the expiration of the three-year period to examine records and/or returns, and to assess any additional tax due. 2. Where a taxpayer filed a false or fraudulent return with the intent to evade tax or where a taxpayer had a filing requirement but no tax return was filed. 3. Where the Internal Revenue Service has increased the income of a taxpayer. Assessments of Mississippi income tax resulting from changes made to a taxpayer's federal return by the Internal Revenue Service must be made within three (3) years of the date the Internal Revenue Service disposes of the liability in question. “Disposes of the tax liability in question” means the date the Department of Revenue receives notice from the Internal Revenue Service of the change in the taxpayer’s reported taxable income.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

In the case of a taxpayer seeking a refund or a reduction in the amount due on a particular return, a taxpayer must apply within three (3) years from the due date of the return or where an extension was granted, three (3) years from the date the return was filed, provided the return was filed on or before the last day of the extension period authorized by the Commissioner.

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35 Miss. Admin. Code Pt. 3, R. 102 Rule 102

When the Internal Revenue Service has made a change which results in a decrease of a taxpayer's Mississippi income tax liability, the Commissioner will allow the reduction within three (3) years of the date the Internal Revenue Service disposes of the liability in question.

35 Miss. Admin. Code Pt. 3, R. 103 Rule 103

When the reportable taxable income of a taxpayer has been decreased by the carryback of a net casualty loss deduction or a net operating loss deduction, the three-year examination period is determined by the tax year in which the loss was incurred.

35 Miss. Admin. Code Pt. 3, R. 104 (Reserved)

35.III.1.10 revised effective January 7, 2019

Chapter 11 Extension of Time to File

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

The Commissioner may grant a reasonable extension of time beyond the statutory due date to file any income or franchise tax return or annual report. The authorized extension of time to file does not extend the time for payment of the income or franchise tax due. Interest and penalty shall apply on any underpayment of tax. Taxpayers having a tax liability who request an extension of time must remit the tax due with the proper Mississippi Application for Extension on or before the due date of their return to receive an automatic extension of time to file their tax returns.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

If no tax liability exists on the due date of the return, the Commissioner will automatically recognize an extension of time authorized and granted by the Internal Revenue Service for the filing of annual income tax returns. Proof of the authorized extension must be maintained with the taxpayer’s records. If proof cannot be presented upon request, extension may not be allowed.

35 Miss. Admin. Code Pt. 3, R. 102 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 103 (Reserved)

Chapter 12 Credit for Income Tax Paid to Another State

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

Pursuant to Miss. Code Ann. Section 27-7-77, Mississippi residents are required to include their total gross income from all sources on their Mississippi income tax return, regardless of where the income was earned or realized. Mississippi residents who earned income in other states and are required to pay an income tax to another state(s) on income that is also subject to Mississippi income tax are allowed a credit for income tax paid to another state against Mississippi tax due. The credit must be claimed in the same taxable year in which the tax is paid to the other state. Non-residents are not allowed this credit.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

“Another state” or “other state” means a state in the United States other than Mississippi, a territory of the United States or the District of Columbia. This credit does not apply to

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taxes paid to any foreign country or to taxes imposed by any city, county or other local taxing jurisdiction.

35 Miss. Admin. Code Pt. 3, R. 102 Rule 102

The amount of the credit is subject to the following limitations: 1. The credit may not exceed the amount of income tax due the State of Mississippi. 2. The credit may not exceed the amount of income tax actually paid to the other state. (Any income tax credits allowed by another state will not be treated as taxes actually paid.) 3. The credit may not exceed an amount computed by applying the highest applicable Mississippi rates to the net taxable income reported to the other state. Highest rates are meant to mean the highest rates at which the net taxable income reported to the other state is taxable by the State of Mississippi.

35 Miss. Admin. Code Pt. 3, R. 103 Rule 103

Copies of withholding statements are not sufficient documentation, as they indicate the amount withheld by the other state not the actual tax liability to the other state. The required documentation, as outlined below, must be attached to the Mississippi Individual Income Tax Return to claim the credit or the credit may be disallowed. 1. The Tax Credit For Income Tax Paid To One Or More Other States form; and 2. A copy of the actual income tax return(s) filed with the other state(s); or 3. Documentation of the amount of tax paid to another state on the taxpayer’s behalf by another entity, such as a federal schedule K-1. This will only be accepted in instances where the other state’s return is not required to be filed by the taxpayer.

35 Miss. Admin. Code Pt. 3, R. 104 Rule 104

If a taxpayer amends the amount of income tax paid to the other state on which the Mississippi credit was based, the taxpayer must file an amended Mississippi Individual Income Tax Return to recalculate the amount of credit allowed.

35 Miss. Admin. Code Pt. 3, R. 105 (Reserved)

35.III.1.12 revised effective January 7, 201

Chapter 13 Reporting or Changing Elections—Change in Reporting Methods

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

Permission must be granted in writing by the Commissioner before any election can be changed. If a taxpayer has an option to make an election and does not knowingly make such election, but reports to Mississippi as though an election had been made, the taxpayer is required to continue filing returns using the same method until granted written permission by the Commissioner to change.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

Additionally, if a taxpayer has an election available and completes his return incorrectly (such as, but not limited to using method which utilizes only part of the requirements of a certain election), the Commissioner shall determine whether, in fact, an election has been made and what method of reporting is to be used.

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35 Miss. Admin. Code Pt. 3, R. 102 Rule 102

Also, permission must be granted in writing by the Commissioner before an accounting method, method of filing or any other methodology change is used by the taxpayer.

35 Miss. Admin. Code Pt. 3, R. 103 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 104 (Reserved)

Subpart 02 Gross Income

Chapter 01 Constructive Receipt of Income

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

Income which is credited to the account of, or set apart, for a taxpayer and which may be used by the taxpayer at any time is subject to tax for the year during which the income is credited or set apart, even though the taxpayer does not have direct possession. To constitute receipt, the income must be credited or set apart to the taxpayer without any substantial limitation or restriction as to the time or the manner of payment or condition upon which payment is to be made, and must be made available to be drawn at any time, and its receipts brought within the taxpayer’s control and disposition.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

If interest coupons have matured and are payable, but have not been cashed, such interest, though not collected when due and payable, shall be included in gross income for the year during which the coupons mature, unless it can be shown that there are no funds available for payment of interest during such year. The interest shall be included in gross income even though the coupons are exchanged for other property instead of eventually being cashed. The amount of defaulted coupons is income for the year in which paid.

35 Miss. Admin. Code Pt. 3, R. 102 Rule 102

Dividends on corporate stock are subject to tax when unqualifiedly made subject to the demand of the shareholder. If a dividend is declared payable on December 31, and the corporation mailed the checks so that the shareholder would not receive them until January of the following year, the dividends are not considered to have been subject to the demand of the shareholders prior to January, when the checks were actually received.

35 Miss. Admin. Code Pt. 3, R. 103 Rule 103

Interest credited on saving bank deposits is income to the depositor when credited. An amount credited to shareholders of a building and loan association, when such credit passes without restriction to the shareholder, has a taxable status as income for the year of the credit. If the shares are restricted by a maturity date, the amount credited will be income to the recipient when the shares mature, providing they are not available for withdrawal prior to maturity.

35 Miss. Admin. Code Pt. 3, R. 104 Rule 104

In the case of a taxpayer reporting income on a cash basis, there should be included in gross income only actual and constructive receipts of income. Taxpayers reporting on the accrual basis must include in gross income amounts received by them or accrued to them.

35 Miss. Admin. Code Pt. 3, R. 105 (Reserved)

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35.III.2.01 revised effective June 15, 2019

Chapter 02 Compensation for Personal Services

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

Compensation means any form of payment made to an individual for services rendered as an employee for an employer; services performed as an employee representative and any separation or termination allowance. Compensation includes wages, salaries, bonuses, gifts, profit-sharing, commissions, tips, vacation pay, sick pay, medical benefits, disability, expense reimbursement, cash incentives, monetary value of non-cash incentives, and any other form of remuneration received in return for services. Compensation can be further defined as income received from the United States or any other state by officials or employees, thereof, whether in a civilian capacity or in the military or naval service, commissions paid salesmen, compensation for services on the basis of a percentage of profits, commissions on insurance premiums, fees and other contributions received by a clergyman, evangelist or religious worker for services rendered.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

Amounts withheld by the employer pursuant to the requirements of Federal and State Income Tax Laws, Federal Social Security Act, Civil Service Retirement Act, and similar retirement systems, unemployment compensation contracts, group life and health plans, stock purchase plans, etc., must be included in the gross income of the employee.

35 Miss. Admin. Code Pt. 3, R. 102 Rule 102

Pursuant to Miss. Code Ann. Section 27-7-16, amounts contributed to a tax-sheltered annuity plan, qualified retirement account and authorized deferred compensation plan shall not be considered elements of gross income in the tax year in which such amounts are deferred.

35 Miss. Admin. Code Pt. 3, R. 103 (Reserved)

35.III.2.02 revised effective June 15, 2019

Chapter 03 Gain or Loss on Disposition of Property

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

The gain or loss from the sale or exchange of property is included in or deducted from gross income, unless specifically excluded by law. Property includes tangible items, such as buildings and office equipment, and intangible items, such as patents and goodwill. Generally, the gain is the excess of the amount realized over the unrecovered cost or other basis of the property sold or exchanged. The specific rules for computing the amount of gain or loss are contained in Miss. Code Ann. Section 27-7-9.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

When a part of a larger property is sold, the cost or other basis of the entire property shall be equitably apportioned among the several parts, and the gain realized or loss sustained on the part of the entire property sold is the difference between the selling price and the cost or other basis allocated to such part. The sale of each part is treated as a separate transaction and the gain or loss shall be computed separately on each part. Thus, the gain or loss shall be determined at the time of sale of each part and not deferred until the disposal of the entire property.

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35 Miss. Admin. Code Pt. 3, R. 102 Rule 102

Certain realized gains or losses on the sale or exchange of property are not included in or deducted from gross income at the time the transaction occurs. Gains or losses from such sales or exchanges are recognized as provided by statute.

35 Miss. Admin. Code Pt. 3, R. 103 Rule 103

Gains realized and recognized on the sale or exchange of a capital asset are treated, for Mississippi income tax purposes, as ordinary income and the total gain recognized on such sale must be included in gross income.

35 Miss. Admin. Code Pt. 3, R. 104 Rule 104

Tax-free exchanges of property will only be allowed when: 1. The real or personal property of both parties is located within Mississippi. 2. The gain on the exchange is recognized under Section 1031 of the Internal Revenue Code.

35 Miss. Admin. Code Pt. 3, R. 105 Rule 105

When an exchange of property consists not only of property that qualifies as a tax-free exchange but also other property or money, any gain must be recognized by the recipient. A loss from this type of exchange is not recognized. The gain will not be in excess of the fair market value of the property and the amount of money received.

35 Miss. Admin. Code Pt. 3, R. 106 (Reserved)

35.III.2.03 revised effective January 1, 2020

Chapter 04 Interest Income

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

Interest received by or credited to the taxpayer constitutes gross income and is fully taxable, unless specifically exempt or excluded by statute. Interest income includes but is not limited to, interest on savings or other bank deposits; interest on coupon bonds; interest on an open account, a promissory note, a mortgage, or a corporate bond or debenture; the interest portion of a condemnation award; usurious interest; interest on legacies; and interest on life insurance proceeds held under an agreement to pay interest thereon.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

Miss. Code Ann. Section 27-7-15(4)(d) provides that gross income does not include interest on obligations of the United States or its possessions, securities issued under the provisions of the Federal Farm Loan Act of 1916, bonds issued by the War Finance Corporation, or obligations of the State of Mississippi or its political subdivisions.

35 Miss. Admin. Code Pt. 3, R. 102 Rule 102

31 U.S.C. Section 3124(a) prohibits states from imposing an income tax on interest income from direct obligations of the United States government. In addition, the enabling legislation for many federal obligations and or instrumentalities prohibit state taxation on income.

35 Miss. Admin. Code Pt. 3, R. 103 Rule 103

"Obligations of the United States" refers to obligations issued to secure credit to carry on the necessary functions of government. United States obligations can also be defined as government obligations used to finance the national debt. Examples of United States

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obligations include U.S. Treasury Securities such as savings bonds, Treasury bills, bonds, notes and certificates.

35 Miss. Admin. Code Pt. 3, R. 104 Rule 104

Interest on obligations of the State of Mississippi and any political subdivision thereof is wholly exempt from tax. The term "obligations of the State of Mississippi" means any obligation backed by the credit of the State of Mississippi. "Any political subdivision" means any county, city or town including special districts such as road, water, sewer, reclamation, drainage, levee, school or similar districts. Interest received upon obligations of any state or its political subdivisions other than Mississippi is taxable.

35 Miss. Admin. Code Pt. 3, R. 105 Rule 105

Interest income earned in connection with repurchase agreements is subject to tax. A repurchase agreement is an agreement with a commitment by the seller (dealer) to buy a security back from the purchaser (customer) at a specified price at a designated future date. It represents a collateralized short-term loan where the collateral may be a federal obligation such as a treasury security or federal agency security. The interest earned is interest on a loan of funds rather than a direct payment of interest on a federal obligation; therefore, it does not qualify for exemption.

35 Miss. Admin. Code Pt. 3, R. 106 Rule 106

A taxpayer's pro rata portion of interest dividends distributed by a Regulated Investment Company, as defined in I.R.C. Section 851, is nontaxable to the extent that such pro rata portion represents interest received by the Regulated Investment Company from governmental securities which would be exempt for Mississippi income tax purposes if such governmental securities were directly held by the taxpayer.

35 Miss. Admin. Code Pt. 3, R. 107 Rule 107

If the governmental agency merely acts as guarantors on loans made by a private lender, such loans are not construed to be direct obligations of the government and the interest accruing on such loans is taxable. A governmental obligation that is secondary, indirect or contingent, such as a guaranty of a non-governmental obligor’s primary obligation to pay the principal amount of and interest on a note, is not an obligation of the type exempted under 31 U.S.C. Section 3124(a).

35 Miss. Admin. Code Pt. 3, R. 108 Rule 108

Taxable interest income includes, but is not limited to, interest earned on obligations from the following agencies, organizations and associations: 1. Building and Loan Associations 2. Credit Unions 3. Export-Import Bank of the United States 4. Farmers Home Administration 5. Federal Agricultural Mortgage Corporation (Farmer Mac) 6. Federal Home Loan Mortgage Corporation (Freddie Mac) 7. Federal Housing Administration 8. Federal National Mortgage Association (Fannie Mae) 9. Government National Mortgage Association (Ginnie Mae) 10. Merchant Marine (Maritime Administration) 11. Money Market Certificates 12. Mortgage Participation Certificates 13. Postal Savings Account

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Savings and Loan Associations 15. Small Business Administration 16. Asian Development Bank 17. Inter-American Development Bank 18. International Bank for Reconstruction and Development (World Bank) 19. Washington D.C. Metro Area Transit Authority

35 Miss. Admin. Code Pt. 3, R. 109 Rule 109

Tax-exempt interest includes, but is not limited to, interest earned on obligations from the following agencies, organizations or associations:

U. S. Treasury 2. Government of American Samoa 3. Government of Guam 4. Government of Puerto Rico 5. Government of Virgin Islands 6. Government of Northern Mariana Islands 7. Bank for Cooperatives 8. Commodity Credit Corporation 9. Farm Credit Banks 10. Farm Credit System Insurance Corporations 11. Federal Deposit Insurance Corporation 12. Federal Financing Bank 13. Federal Home Loan Banks 14. Federal Intermediate Credit Banks 15. Federal Land Bank Associations 16. Financial Assistance Corporation 17. Financing Corporation 18. General Services Administration (GSA) 19. Housing and Urban Development – General Insurance Fund i. Armed Services Mortgage Insurance ii. Mutual Mortgage Insurance Fund iii. National Defense Housing Insurance iv. Rental Housing Insurance v. War Housing Insurance 20. National Credit Union Administration Central Liquidity Facility 21. Production Credit Association 22. Student Loan Marketing Association (Sallie Mae) 23. Tennessee Valley Authority (TVA) 24. United States Postal Service

35 Miss. Admin. Code Pt. 3, R. 110 Rule 110

Interest received from a federal or state government that was earned on other than investment obligations, such as interest on tax refunds, is subject to Mississippi income tax and should be included in gross income.

35 Miss. Admin. Code Pt. 3, R. 111 (Reserved)

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35.III.2.04 revised effective January 1, 2021

Chapter 05 Rents and Royalties

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

The Commissioner will follow Federal Rules, Regulations and Revenue Procedures relating to gross income from rents and royalties as are deemed not contrary to the context and intent of Mississippi Law.

35 Miss. Admin. Code Pt. 3, R. 101 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 102 (Reserved)

Chapter 06 Dividend Income

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

Dividends are included in gross income unless specifically excluded under Miss. Code Ann. Section 27-7-15(4)(i).

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

The term "dividend" for the purpose of the Mississippi Income Tax Law means any distribution of property in the ordinary course of business, even though extraordinary in amount, made by a domestic or foreign corporation to its shareholders out of earnings and profit.

35 Miss. Admin. Code Pt. 3, R. 102 Rule 102

The earnings and profits of the taxable year shall be computed as of the close of such year, without reduction by reason of any distributions made during the taxable year. Liquidating dividends do not have the status of dividends for Mississippi income tax purposes. Such distributions constitute a return of investment and the gain or loss realized or sustained is one of capital.

35 Miss. Admin. Code Pt. 3, R. 103 Rule 103

Dividends must be included in gross income of the shareholder if such dividends have not already borne a tax in Mississippi or another state prior to the receipt of same by such shareholders.

35 Miss. Admin. Code Pt. 3, R. 104 Rule 104

In order for dividend interest from a domestic mutual building and loan association to be excluded from gross income, it must be clearly shown to the satisfaction of the Commissioner that such dividend received has been used to reduce the total interest paid.

35 Miss. Admin. Code Pt. 3, R. 105 Rule 105

Dividends are taxable to the taxpayer who has the right to receive them. If a dividend is paid after stock is sold, whether the purchaser or seller includes the dividend in gross income depends on when the sale took place. When stock is sold, and a dividend is both declared and paid after the sale, such dividend is not gross income to the seller. When stock is sold after the declaration of a dividend and after the date the seller becomes entitled to the dividend, the dividend is income to the seller. When the sale of stock occurs between the time of declaration and the payment of the dividend, the purchaser becomes entitled to the dividend and the dividend is income to the purchaser. In some cases the purchaser may be considered the recipient of the dividend even though they had not received the legal title to the stock and they did not receive the dividend. For example, when the seller retains the

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legal title to the stock as trustee solely for the purpose of securing the payment of the stock’s purchase price, with the understanding that the seller will apply the dividends as payment to the stock’s purchase price. In this case, the dividends are considered to be income to the purchaser.

35 Miss. Admin. Code Pt. 3, R. 106 Rule 106

If the purchaser includes the amount of an anticipated dividend in the stock purchase price, this will not exempt the purchaser from income tax on the dividend. The added amount is merely part of the purchase price of the stock.

35 Miss. Admin. Code Pt. 3, R. 107 Rule 107

Stock dividends are distributions of a company’s earnings to shareholders in the form of additional shares of the same company according to the proportion of shares owned. Stock dividends are not included in the shareholder’s gross income unless the distribution falls under one of the exceptions. Stock dividends do not change the total value of the stockholder’s stock, instead the basis of each share changes.

35 Miss. Admin. Code Pt. 3, R. 108 Rule 108

Exceptions to the general tax-free treatment of stock dividends occur when a stock dividend results in a change in the proportionate ownership or increases a shareholder’s interest in the assets or earnings and profits of the corporation. When an exception applies, the stock dividend must be recognized as income at the fair market value of the distributed stock as of the date of distribution. Stock dividends are generally gross income to shareholders in the following situations: a. A distribution in which any shareholder has the option to receive cash or other property instead of stock in the distributing corporation; b. Disproportionate distribution of stock; c. Any distribution of stock which results in some common shareholders receiving preferred stock and the other common shareholders receiving common stock; d. Distribution on preferred stock; and e. Distribution of convertible preferred stock.

35 Miss. Admin. Code Pt. 3, R. 109 Rule 109

Dividends paid in securities or other property (other than its own stock) in which the earnings of a corporation have been invested are income to the recipients at the fair market value of such property when distributed by the corporation to the shareholder. Scrip dividends are payments to the company’s shareholders in the form of new shares rather than money. Scrip dividends are subject to tax in the year in which the certificate is issued.

35 Miss. Admin. Code Pt. 3, R. 110 Rule 110

If a corporation cancels or redeems its stock at such a time and in such manner as to make the distribution in whole or in part essentially equivalent to a taxable dividend, the amount so distributed, to the extent it represents a distribution of earnings and profits, shall be treated as a taxable dividend.

35 Miss. Admin. Code Pt. 3, R. 111 Rule 111

The Commissioner will follow federal rules, regulations and revenue procedures relating to dividends to the extent that such procedures are not deemed contrary to the context and intent of Mississippi Law.

35 Miss. Admin. Code Pt. 3, R. 112 (Reserved)

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35.III.2.06 revised effective January 1, 2021

Chapter 07 Income from Retirement Allowances, Pensions, Annuities or Optional Retirement Allowances

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

Amounts received as retirement allowances, pensions, annuities or optional retirement allowances from any Federal, State, and Private retirement system or plan are exempt from State Income Tax.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

Optional retirement allowances include all income from Keogh Plans, Individual Retirement Accounts (IRA’S), and other similar tax deferred plans.

35 Miss. Admin. Code Pt. 3, R. 102 Rule 102

Optional retirement allowances also include income from deferred compensation plans to the extent these plans are tax deferred under federal income tax law and the recipient is qualified to receive other retirement income based on minimum age, years of service, or other criteria at the time of receipt of the deferred compensation.

35 Miss. Admin. Code Pt. 3, R. 103 Rule 103

Amounts received as a distribution under a Roth Individual Retirement Account shall be treated in the same manner as provided under the Internal Revenue Code of 1986, as amended.

35 Miss. Admin. Code Pt. 3, R. 104 Rule 104

Early distributions from retirement plans do not qualify for this exemption. Although these amounts are subject to state income tax, there is no early withdrawal penalty for state purposes. In addition, the terms “retirement allowances, pensions, annuities or optional retirement allowances” do not include income from investments in stocks, bonds, intangible securities, real properties, or tangible properties.

35 Miss. Admin. Code Pt. 3, R. 105 Rule 105

The above exemption from income tax extends to the spouse or other beneficiary upon the death of the primary retiree.

35 Miss. Admin. Code Pt. 3, R. 106 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 107 (Reserved)

Chapter 08 Income of a Minor Child or Dependent

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

Compensation for personal services of a child shall, regardless of the provisions of state law relating to whom is entitled to the earnings of the child, and regardless of whether the income is in fact received by the child, be deemed to be the gross income of the child and not the gross income of the parent of the child. Such compensation, therefore, shall be included in the gross income of the child and shall be reflected in the return rendered by or for such child. The income of a minor child is not required to be included in the gross income of the parent for income tax purposes.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

In the determination of taxable income or net income, all expenditures made by the parent or the child attributable to amounts which are includible in the gross income of the child

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and not of the parent are deemed to have been paid or incurred by the child. In such determinations, the child is entitled to take deductions not only for expenditures made on his behalf by his parent which would be commonly considered as business expense, but also for other expenditures such as charitable contributions made by the parent in the name of the child and out of the child's earnings.

35 Miss. Admin. Code Pt. 3, R. 102 Rule 102

The term "parent" includes maternal parent, adoptive parent, guardian or any other person who is legally charged with the care of the minor.

35 Miss. Admin. Code Pt. 3, R. 103 Rule 103

A tax return shall be made by the person charged with the care of a minor or his property, unless the minor himself makes or causes to be made his tax return.

35 Miss. Admin. Code Pt. 3, R. 104 Rule 104

The Commissioner will follow Federal Rules, Regulations and Revenue Procedures issued under Section 73, IRC, and such other Federal Rules and Regulations relating to income of a minor child or dependent as are deemed not contrary to the context and intent of Mississippi Law.

35 Miss. Admin. Code Pt. 3, R. 105 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 106 (Reserved)

Chapter 09 Prizes, Awards, Stipends, Scholarships and Fellowship Grants

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

Amounts received as prizes and awards are generally included in gross income. Examples include, but are not limited to, amounts received from radio and television giveaway shows, door prizes, awards in contests of all types, as well as any prizes and awards from an employer to an employee in recognition of an employment related achievement.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

For prizes or awards other than money, the fair market value of the goods or services is the amount to be included in gross income.

35 Miss. Admin. Code Pt. 3, R. 102 Rule 102

Stipends, which are compensation for services (past, present or future), are included in gross income.

35 Miss. Admin. Code Pt. 3, R. 103 Rule 103

Gross income does not include scholarship or fellowship grants when the funds are used for qualified education expenses. Qualified education expenses include tuition and fees required for enrollment or attendance at the education institution, or books, fees, supplies, and equipment required for courses at the educational institution. Scholarship or fellowship funds used for non-qualifying expenses are taxable. Non-qualifying expenses include, but are not limited to, living and incidental expenses such as room and board, travel, clerical help, research, non-required books and optional equipment.

35 Miss. Admin. Code Pt. 3, R. 104 Rule 104

The Commissioner will follow federal rules, regulations and revenue procedures regarding prizes, awards and stipends as are deemed not contrary to the context and intent of Mississippi Law.

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35 Miss. Admin. Code Pt. 3, R. 105 Rule 105

See Title 35 Mississippi Administrative Code, Part III, Subpart 3, Chapter 09 Gaming Winnings and Gaming Income, for the treatment of prizes from a gaming establishment or gaming activity.

35 Miss. Admin. Code Pt. 3, R. 106 (Reserved)

35.III.2.09 revised effective January 1, 2020

Chapter 10 Reserved

35.III.2.10 revised effective June 15, 2019

Chapter 11 Individual Non-Business Deductions

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

The amount allowable for individual non-business itemized deductions for federal income tax purposes is the same for state income tax purposes with the following exceptions: 1. The federal deduction for state and local income taxes paid and any tax allowed for federal purposes in lieu of state income tax; 2. Gambling losses from Mississippi gaming establishments; and 3. Taxes collected by Mississippi gaming establishments pursuant to Mississippi Ann. Code Sections 27-7-901 and 27-7-903.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

These items are not allowable deductions for state purposes in any form. If these items are deducted on federal form Schedule A, an adjustment must be made for state purposes. Local income taxes are to be treated the same as state income taxes.

35 Miss. Admin. Code Pt. 3, R. 102 Rule 102

A taxpayer must itemize deductions if the taxpayer’s filing status is married filing separately and the taxpayer’s spouse itemized deductions on their return.

35 Miss. Admin. Code Pt. 3, R. 103 Rule 103

An individual may elect to take either the standard deduction or itemize their deductions regardless of what the individual elected on their federal income tax return. If a taxpayer’s allowable federal itemized deductions are limited due to the amount of the taxpayer’s federal adjusted gross income, then the allowable Mississippi itemized deductions will be correspondingly limited.

35 Miss. Admin. Code Pt. 3, R. 104 (Reserved)

35.III.2.11 revised effective January 1, 2020

Chapter 12 Amounts Received Under Accident and Health Plans

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

The Commissioner will follow Federal Rules, Regulations and Revenue Procedures to the extent that such procedures are not deemed contrary to the context and intent of Mississippi Law.

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35 Miss. Admin. Code Pt. 3, R. 101 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 102 (Reserved)

Chapter 13 Compensation for Injuries and Sicknesses

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

The Commissioner will follow Federal Rules, Regulations and Revenue Procedures to the extent that such procedures are not deemed contrary to the context and intent of Mississippi Law.

35 Miss. Admin. Code Pt. 3, R. 101 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 102 (Reserved)

Chapter 14 Strike Benefits

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

Amounts paid by an organized union as unemployment benefits to its unemployed members are taxable if the benefits come out of union dues. If union members make special payments to a fund, unemployment benefits received from the fund are includible in gross income only to the extent they exceed the recipient's contributions. The amounts paid into the fund are not deductible.

35 Miss. Admin. Code Pt. 3, R. 101 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 102 (Reserved)

Chapter 15 Return of Life Insurance, Annuity or Endowment Policies

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

The Commissioner will follow Federal Rules, Regulations and Revenue Procedures as are deemed not contrary to the context and intent of Mississippi Law.

35 Miss. Admin. Code Pt. 3, R. 101 (Reserved) 102 (Reserved)

Chapter 16 Unemployment Compensation Benefits

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

Unless otherwise instructed in writing, the Commissioner will follow Federal Rules, Regulations and Revenue Procedures relating to the taxability of unemployment benefits as are deemed not to be contrary to the context and/or intent of Mississippi Law.

35 Miss. Admin. Code Pt. 3, R. 101 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 102 (Reserved)

Chapter 17 Rental Allowance and Fair Rental Value of a Parsonage

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35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

“Rental allowance” means an amount paid to a minister to rent or otherwise provide a home if such amount is designated as rental allowance pursuant to official action taken in advance of such payment by the employing church or other qualified organization. The designation of an amount as rental allowance should be evidenced in an employment contract, in minutes of or in a resolution by a church or other qualified organization or in its budget, or in any other official document of the church or organization. Rental allowance may be referred to as housing allowance or parsonage allowance.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

A rental allowance must be included in the minister's gross income in the taxable year in which it is received, to the extent that such allowance is not used by the minister during such taxable year for rent of a home, for purchase of a home and for expenses directly related to providing a home. Where the minister rents, purchases or owns a farm or other business property in addition to a home, the portion of the rental allowance expended in connection with the farm or business property shall not be excluded from the minister’s gross income.

35 Miss. Admin. Code Pt. 3, R. 102 Rule 102

Gross income does not include the rental value of a home, including utilities, furnished to a minister as a part of the compensation, or the rental allowance paid to the minister as part of the compensation to the extent such allowance is used by the minister to rent or provide a home. In order to qualify for the exclusion, the home or rental allowance must be provided as compensation for services that are ordinarily the duties of a minister of the gospel.

35 Miss. Admin. Code Pt. 3, R. 103 (Reserved)

35.III.2.17 revised effective January 1, 2021

Chapter 18 Recovery of Tax Benefit Items

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

The Commissioner will follow Federal Rules, Regulations and Revenue Procedures relating to recovery of tax benefit items as are deemed not contrary to the context and intent of Mississippi Law.

35 Miss. Admin. Code Pt. 3, R. 101 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 102 (Reserved)

Chapter 19 Gross Income of Farmers

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

The Commissioner will follow Federal Rules, Regulations and Revenue Procedures to the extent that such procedures are not deemed contrary to the context and intent of Mississippi Law. 101 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 102 (Reserved)

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Subpart 03 Exclusions from Gross Income

Chapter 01 (Reserved)

Chapter 02 Exclusion for Improvements Erected by Lessee

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

The value of improvements to real property, attributable to buildings erected or other improvements made by the lessee upon the leased property is excluded from gross income of the lessor. However, where the facts disclose that such buildings or improvements represent, in whole or in part, a substitution for rent payments for the lease period, the exclusion does not apply.

35 Miss. Admin. Code Pt. 3, R. 101 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 102 (Reserved)

Chapter 03 Employee Benefits

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

A taxpayer may exclude from gross income compensation which is received under a worker's compensation act, for personal injuries or sickness incurred in the course of employment. The exclusion also applies to compensation which is paid under a worker's compensation act to the survivor or survivors of a deceased employee. The exclusion does not apply to a retirement pension or annuity to the extent that it is determined by reference to the employee's age or length of service, or the employee's prior contributions, even though the employee's retirement occurs from an occupational injury or sickness. Amounts received as compensation for a non-occupational injury or sickness, and amounts received as compensation for an occupational injury or sickness in excess of the amount provided in the applicable worker's compensation act are also not subject to the exclusion.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

A taxpayer may exclude from gross income the amount of any damages received under a suit or settlement of a claim on account of personal injuries or sickness. Damages in cases of nonphysical injury equal to the amount of medical expenses for treatment of emotional distress may be excluded from gross income.

35 Miss. Admin. Code Pt. 3, R. 102 Rule 102

A taxpayer may exclude from gross income the amounts received through accident or health insurance for personal injuries or sickness to the extent that such amounts are not attributable to contributions of the employer which are not includible in the gross income of the employee or are not paid by the employer. Therefore, if an employee received compensation for personal injuries or sickness from an accident or health insurance policy which the worker purchased or from a fund maintained exclusively by employee contributions, the amounts received are excluded from gross income.

35 Miss. Admin. Code Pt. 3, R. 103 Rule 103

Amounts received by employees under employer financed accident and health plans may be excluded from gross income if such amounts are paid to reimburse the taxpayer for expenses incurred for medical care of the taxpayer, spouse or dependents or to reimburse

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the employee for medical care and payments for permanent injury or loss of bodily function.

35 Miss. Admin. Code Pt. 3, R. 104 Rule 104

35 Miss. Admin. Code Pt. 3, R. 105 Rule 105

Nontaxable benefits under Section 125 of the Internal Revenue Code referred to as "cafeteria plans" are also excludable for Mississippi Income Tax purposes to the extent allowed by the IRC. Mississippi also recognizes Section 129 of the Internal Revenue Code pertaining to dependent care assistance programs and Section 127 of the Internal Revenue Code pertaining to employer provided educational assistance plans. The benefits mentioned above under IRC Sections 125, 127 and 129 are not subject to Mississippi withholding.

35 Miss. Admin. Code Pt. 3, R. 106 Rule 106

The value of any meals or lodging furnished to an employee, his spouse or any of his dependents by or on behalf of his employer for the convenience of the employer may be excluded from gross income of an employee but only if in the case of meals, the meals are furnished on the business premises of the employer, or in the case of lodging, the employee is required to accept such lodging on the business premises of his employer as a condition of his employment.

35 Miss. Admin. Code Pt. 3, R. 107 Rule 107

The rental value of a dwelling furnished to a minister of the gospel is exempt from tax as is a rental allowance to the extent that the allowance is used to rent or provide a home. This includes the portion of a retired minister's pension designated as a rental allowance by the national governing body of a religious denomination having complete control over the retirement fund. The exemption also applies to the rental value of a residence furnished to a retired minister (but not the minister's spouse).

35 Miss. Admin. Code Pt. 3, R. 108 (Reserved)

35.III.3.03 revised effective January 1, 2022

35 Miss. Admin. Code Pt. 3, R. 109 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 110 (Reserved)

Chapter 04 (Reserved)

Chapter 05 Proceeds of Life Insurance

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

Mississippi law excludes from the definition of "Gross Income" the proceeds of life insurance policies and contracts paid upon the death of the insured. Mississippi does not limit the exclusion on any death benefit paid by or for the employer of the deceased employee.

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35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

All interest income on life insurance proceeds should be included in gross income.

35 Miss. Admin. Code Pt. 3, R. 102 Rule 102

The Commissioner will follow Federal Rules, Regulations and Revenue Procedures as are deemed not contrary to the context and intent of Mississippi Law.

35 Miss. Admin. Code Pt. 3, R. 103 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 104 (Reserved)

Chapter 06 Reserved

35.III.3.06 revised effective January 1, 2020

Chapter 07 Contributions by Employer to Accident and Health Plans

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

The gross income of an employee does not include contributions which his employer makes to an accident or health plan for compensation (through insurance or otherwise) to the employee for personal injuries or sicknesses incurred by him, his spouse or his dependents. The employer may contribute to an accident or health plan either by paying the premium (or a portion of the premium) on a policy of accident or health insurance covering one or more of his employees, or by contributing to a separate trust or fund. However, if such insurance policy, trust or fund provides other benefits in addition to accident and health benefits, the exclusion applies only to that portion of the employer's contribution which is allocable to accident and health benefits.

35 Miss. Admin. Code Pt. 3, R. 101 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 102 (Reserved)

Chapter 08 Exclusion Military Pensions and Disability Payments for Certain Injuries and Sicknesses

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

The Commissioner will follow Federal Rules, Regulations and Revenue Procedures relating to the classification and tax treatment of amounts permitted as an exclusion under this regulation to the extent that such procedures are deemed not contrary to the context and intent of Mississippi Law.

35 Miss. Admin. Code Pt. 3, R. 101 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 102 (Reserved)

Chapter 09 Gaming Winnings and Gaming Income

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35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

Amounts received in cash or other remuneration from play at a gambling game or as a prize, lottery, award, or tournament winning are subject to an income tax levy. However, the reporting requirements and tax levy will vary depending on the source of the income.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

Terms 1. The term "Mississippi gaming establishment" or "gaming establishment" means any establishment where gambling games are conducted or operated within this state and any party that provides or is responsible for the payment of cash or other remuneration resulting directly or indirectly from play at gambling games within this state. Gaming establishments include those establishments required to be licensed under the Mississippi Gaming Control Act, establishments which would be licensed under the Mississippi Gaming Control Act but for a federal preemption, and the Mississippi Lottery Corporation. 2. The term “Mississippi gaming winnings” or "gaming winnings" includes all amounts that are paid, whether in cash or other form, by Mississippi gaming establishments to patrons which are subject to the withholding and/or reporting requirements of the Internal Revenue Code (IRC) as specified in Miss. Code Ann. Sections 27-7-901 and 27-7-903. Such amounts are not limited to cash or remuneration from play at a gambling game, but include, without limitation, amounts considered prizes, awards, tournament winnings, or similar types of compensation. 3. The term "paid" means the gross amount of gaming winnings without respect to any reduction for tax withholdings or other reserves and may not be less than the amount reported for federal tax purposes.

35 Miss. Admin. Code Pt. 3, R. 102 Rule 102

Mississippi Gaming Winnings 1. A tax levy of three percent (3%) is made on all Mississippi gaming winnings. Such amount is required to be withheld by the Mississippi gaming establishment. The amount of tax withheld from gaming winnings will be reflected on Federal Form W- 2G or other information return filed by the gaming establishment to report the transaction. The amount to be withheld is three percent (3%) of the amount paid, whether in cash or other form, to the recipient. 2. Multi-period payoffs: If a patron is entitled to receive either a lump-sum payment or a series of periodic payments received at least annually, then a tax of three percent (3%) is levied on the lump-sum amount in the year it is constructively received. The three percent (3%) levy is a liability of the Mississippi gaming establishment which was a party to the wager, regardless of whether it is the paying agent. 3. The three percent (3%) withheld on Mississippi gaming winnings reflects the tax due and once such proper amounts are remitted to the Department of Revenue by the Mississippi gaming establishment, as well as a properly completed W-2G, 1099, or other federally prescribed informational statement (filed annually or as prescribed by the Commissioner), the patron has no further filing requirements. If the federally prescribed information return does not allow for the recording of both state income and state tax withholdings, then a W-2G should be completed and attached as part of the filing of such statement. 4. The W-2G or 1099 reflecting the income and Mississippi withholding once remitted by the Mississippi gaming establishment to the Department of Revenue serves as the

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patrons return filing for such income. Accordingly, Mississippi gaming winnings are not reported on the patron's regular income tax return filing. Likewise, the amounts withheld cannot be claimed on an income tax return filing to offset a tax liability, create a refund, or to generate any other type of credit or offset.

35 Miss. Admin. Code Pt. 3, R. 103 Rule 103

Other Mississippi Gaming Income Except for the amounts described in paragraph 102, all other gaming income is subject to the income tax levy provided for in Miss. Code Ann. Section 27-7-3. Any gaming losses incurred at Mississippi gaming establishments are a reduction, as compared to an itemized deduction, to Mississippi gaming income. The net of such amounts, if positive, is reportable by the patron as taxable Mississippi income. Mississippi gaming income includes any gaming income not covered by the three percent (3%) levy described in paragraph 102 received from a Mississippi gaming establishment. Mississippi gaming losses may not be taken as a separate deduction or otherwise offset any income other than Mississippi gaming income not subject to the three percent (3%) withholding requirement and resulting from a wager.

35 Miss. Admin. Code Pt. 3, R. 104 Rule 104

Non-Mississippi Gaming Income Mississippi follows federal rules, regulations, and revenue procedures to the extent not contrary to the laws of this state in determining the amount of gaming income received and gaming losses incurred by Mississippi residents at non-Mississippi gaming establishments. Non-Mississippi gaming income is reported apart from any non-Mississippi gaming losses incurred. Non-Mississippi gaming losses are allowed as an itemized deduction to the extent of any non-Mississippi gaming income. In no event may the deduction for such losses exceed the non-Mississippi gaming income.

35 Miss. Admin. Code Pt. 3, R. 105 (Reserved)

35.III.3.09 revised effective October 4, 2021

Subpart 04 Adjustments to Gross Income

Chapter 01 Adjustments to Gross Income

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

Payments to an IRA, SEP, Keogh Retirement Plan (Retirement Plans) A deduction is allowed for contributions to various retirement plans to the extent that such payments are deductible for federal income tax purposes. For details, see Regulation 402.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

Interest Penalty on Early Withdrawal of Savings Amounts forfeited to a financial institution, such as a penalty for premature withdrawal of funds form a time savings account, certificate of deposit, or similar class of deposit, are allowed as a deduction from gross income. The 1099 form furnished by the financial institution will show the amount of any interest penalty charge for early withdrawal. This amount is deductible form gross income.

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35 Miss. Admin. Code Pt. 3, R. 102 Rule 102

Alimony and Separate Maintenance Payments 1. A deduction from gross income in determining adjusted gross income is allowable with respect to payments in the nature of, or in lieu of alimony or an allowance for spousal, not child, actually paid by the taxpayer during the taxable year. This same amount must be included in the income of the spouse receiving the payment. 2. Unless otherwise instructed in writing, the Commissioner will follow the Federal Rules, Regulations and Revenue Procedures relating to alimony and separate maintenance payments as are deemed not to be contrary to the context and/or intent of Mississippi Law.

35 Miss. Admin. Code Pt. 3, R. 103 Rule 103

Moving Expenses Moving expenses are deductible as an adjustment to gross income as allowed for federal income tax purposes. Attach a copy of the federal form to the Mississippi return. Unless otherwise instructed in writing, the Commissioner will follow Federal Rules, Regulations and Revenue Procedures relating to the deduction of un-reimbursed allowable moving expenses as are deemed not to be contrary to the context and/or intent of Mississippi Law.

35 Miss. Admin. Code Pt. 3, R. 104 Rule 104

National Guard or Reserve Pay A taxpayer is allowed a deduction to gross income for compensation received as a member of the National Guard or Reserve Forces of the United State not to exceed the sum of Five Thousand Dollars ($5,000.00) for any taxable year. Only compensation received as payment for inactive duty training (monthly or special drills or meetings), active duty training (summer camps, special schools, cruises) and state active duty (emergency duty) qualifies for this deduction to gross income. Full-time National Guard pay is not allowed as a deduction. Report this income as regular wages or salaries.

35 Miss. Admin. Code Pt. 3, R. 105 Rule 105

MPACT or MACS Program Payments 1. Taxpayers who make payments to a prepaid tuition contract or a college savings account under the MPACT (Mississippi Prepaid Affordable College Tuition) or the MACS (Mississippi Affordable College Savings) programs are allowed a deduction for the actual amounts paid during the taxable year as an adjustment to gross income. Each program shall provide to the taxpayer an annual statement of account to identify the amount paid and therefore, eligible for the adjustment. 2. Unqualified distributions of previously deducted MPACT or MACS payments must be included in gross income in the year they are received. Payments to other prepaid tuition programs are not eligible for this deduction.

35 Miss. Admin. Code Pt. 3, R. 106 Rule 106

Self-Employed Health Insurance Deduction Amounts paid by a self-employed individual for insurance which constitute medical care for the taxpayer, his spouse and dependents, are deductible as an adjustment to gross income. Unless otherwise instructed in writing, the Commissioner will follow Federal Rules, Regulations and Revenue Procedures relating to the deduction of self-employed health insurance as are deemed not to be contrary to the context and/or intent of Mississippi Law.

35 Miss. Admin. Code Pt. 3, R. 107 (Reserved)

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35 Miss. Admin. Code Pt. 3, R. 108 (Reserved)

Chapter 02 Adjustments to Gross Income—Retirement Plans

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

An adjustment to gross income for contributions to a tax-sheltered annuity may be claimed for Mississippi income tax purposes only to the extent permitted for Federal Income Tax purposes. The Commissioner will, therefore, follow the Federal Rules, Regulations and Revenue Procedure issued under Section 403(b), IRC, and such other Federal Rules and Regulations relating to contributions to tax-sheltered annuities as are deemed not contrary to the context and intent of Mississippi Law.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

Qualified Deferred Compensation Plans. Members of the Mississippi Public Employees Retirement System may exclude from wages and salaries (gross income) for Mississippi income tax purposes amounts contributed by the employee to the Mississippi Public Employees Deferred Compensation Plan, a deferred compensation program authorized by Mississippi Code Section 25-14-11 et seq.

35 Miss. Admin. Code Pt. 3, R. 101.01 Rule 101.01

Beginning July 1, 1982, amounts withheld from the wages and salaries of members of the Mississippi Public Employees Retirement System as required contributions to the retirement fund are excludable from gross income.

35 Miss. Admin. Code Pt. 3, R. 101.02 Rule 101.02

The Commissioner will follow those rules and regulations issued by the Internal Revenue Service relating to an exclusion for contributions to an authorized and qualified deferred compensation plan as are deemed not contrary to the context and intent of Mississippi Law.

35 Miss. Admin. Code Pt. 3, R. 102 Rule 102

Self-Employed Retirement Plan. A deduction from gross income in determining adjusted gross income is allowable for amounts contributed by a self-employed individual to a qualified retirement plan which meets the qualifications and restrictions of a plan established under Sections 401-405, IRC, and only to the extent that such contributions are deductible for Federal income tax purposes.

35 Miss. Admin. Code Pt. 3, R. 103 Rule 103

Retirement Savings-IRA's. A deduction from gross income in determining adjusted gross income is allowable for amounts paid during the taxable year of an individual by or on behalf of such individual for his benefit to an individual retirement account described in Section 408(b), IRC, or for a retirement bond described in Section 409, IRC, to the extent that such amounts are deductible for Federal income tax purposes under Section 219, IRC. Also, a deduction is allowable for amounts paid in cash for a taxable year by or on behalf of such individual for the benefit of himself and his spouse.

35 Miss. Admin. Code Pt. 3, R. 103.01 Rule 103.01

Any part of a lump-sum distribution from a qualified retirement plan which is rolled over into an individual retirement account described in Section 408(a), IRC, and an individual retirement annuity described in Section 409, IRC, may be deducted from gross income for Mississippi income tax purposes only to the extent that such roll over amounts are permitted as a deduction or exclusion for Federal income tax purposes.

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35 Miss. Admin. Code Pt. 3, R. 104 Rule 104

Amounts withheld from wages as required contributions to the Federal Insurance Contributions Act are not deductible or excludable from gross income.

35 Miss. Admin. Code Pt. 3, R. 105 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 106 (Reserved)

Subpart 05 Business Deductions General

Chapter 01 Business Deductions

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

The taxable income on which the income tax is based is the gross income of the taxpayer, less certain specific deductions allowed by law plus, in the case of individuals, trusts and estates, certain specific amounts for personal and additional exemptions. The allowance for deductions fall into three basic classes; namely, 1. Ordinary and necessary expenditures connected with a trade or business. 2. Adjustments to gross income. 3. Non-business individual itemized deductions or standard deduction.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

Business deductions falling within class 1 above are deductible from the gross profit of the trade or business to determine the net profit or loss of the business activity. Deductions falling within class 2 above are deductible from the gross income of the taxpayer to determine net income, commonly referred to as adjusted gross income, and may be claimed by the individual regardless of whether non-business deductions are itemized. Deductions falling within class 3 are generally personal in nature and may be claimed only when itemized. In lieu of itemizing personal non-business deductions, the individual may elect to claim the optional standard deduction.

35 Miss. Admin. Code Pt. 3, R. 102 Rule 102

Under no circumstances, may an item of expense be deducted as both a business deduction and a non-business deduction, either in fact or in effect, in the taxable year.

35 Miss. Admin. Code Pt. 3, R. 103 Rule 103

Business expenses deductible from gross income include the ordinary and necessary expenditures directly connected with or pertaining to the taxpayer's trade or business. The cost of goods purchased for resale, with proper adjustment for opening and closing inventories, is deducted from gross sales in computing gross income.

35 Miss. Admin. Code Pt. 3, R. 104 Rule 104

Among items included in business expenses are management expenses, commissions, labor, supplies, incidental repairs, operating expenses of automobiles used in the trade or business, traveling expenses while away from home solely in the pursuit of a trade or business, advertising and other selling expenses, together with insurance premiums against fire, storm, theft, accident or other similar losses in the case of a business and rental for the use of business property.

35 Miss. Admin. Code Pt. 3, R. 105 Rule 105

However, no such item shall be included in business expenses to the extent that it is used by the taxpayer in computing the cost of property included in its inventory or used in determining the gain or loss of its plant, equipment or other property. The full amount of

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the allowable deduction for ordinary and necessary expenses in carrying on a business is deductible, even though such expenses exceed the gross income derived during the taxable year from such business.

35 Miss. Admin. Code Pt. 3, R. 106 Rule 106

The following requirements determine whether a particular item of expense is deductible as a business expense: It must be incurred in a trade or business carried on by the taxpayer. This excludes all personal expenses as well as expenses sustained in earning income, but not arising from a trade or business. Expenses directly related to earning exempt income are not deductible.

35 Miss. Admin. Code Pt. 3, R. 107 The "expense" cannot be a capital expenditure

35 Miss. Admin. Code Pt. 3, R. 108 Rule 108

The expenses must be ordinary, necessary and reasonable. To the extent that an expense is unreasonable, it is not necessary and will not be allowed as a deduction.

35 Miss. Admin. Code Pt. 3, R. 109 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 110 (Reserved)

Chapter 02 Expenditures Attributable to Lobbying, Political Campaigns, Attempts to Influence Legislation, etc., and Certain Advertising

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

A taxpayer may take a business expense deduction for an ordinary and necessary expenditure in regard to certain types of activities relating to promoting or combating legislation. An expense is deductible if it is paid or incurred (1) in direct connection with an appearance before, submission of statements to, or sending communications to, Congressional Committees or legislative bodies of states, U. S. possessions, etc., in regard to legislation of direct interest to the taxpayer, or (2) in direct connection with communication of information between the taxpayer and a trade or business organization of which he is a member concerning legislation of direct interest to both parties.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

A portion of the dues for membership in an organization engaged in such activities is deductible. The deduction is limited to that portion which is attributable to the expenses incurred by the organization engaged in such activities.

35 Miss. Admin. Code Pt. 3, R. 102 Rule 102

However, expenses incurred in an attempt to influence the general public, or segments thereof, are nondeductible. This limitation applies to a corporation's attempt to influence its shareholders.

35 Miss. Admin. Code Pt. 3, R. 103 Rule 103

Political contributions are not deductible either as business expenses or as charitable contributions.

35 Miss. Admin. Code Pt. 3, R. 104 Rule 104

Deductions otherwise allowable as a business expense shall not be allowed for any amount paid or incurred for admission to any program or event identified with a political candidate or party or if any portion of the proceeds from such program or event inures to or for the use of the party or candidate.

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35 Miss. Admin. Code Pt. 3, R. 105 Rule 105

Expenditures for institutional or "good will" advertising which keeps the taxpayer's name before the public are deductible business expenses if the expenditures are related to the patronage the taxpayer might reasonably expect in the future.

35 Miss. Admin. Code Pt. 3, R. 106 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 107 (Reserved)

Chapter 03 Taxes Paid as Business Expense

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

Only the following taxes shall be allowed as a business expense deduction in computing net income for the taxable year within which paid or accrued, according to the method of accounting used in computing taxable income: 1. State and local, and foreign, real property taxes. 2. State and local personal property taxes. 3. Cigar and cigarette taxes, gasoline taxes, and sales and use taxes if included in business gross income, or if incurred as an item of expense in a trade or business or in the production of taxable income.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

In addition, there shall be allowed as a business expense deduction state and local taxes, not described in the preceding section and not otherwise specifically excluded under the following section of this chapter, which are paid or accrued within the taxable year in carrying on a trade or business.

35 Miss. Admin. Code Pt. 3, R. 102 Rule 102

The following taxes shall not be allowed as a business expense deduction in computing net income: 1. Federal and state income taxes. 2. Any taxes based on or measured by net income. 3. Estate and inheritance taxes. 4. Gift taxes. 5. 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.

35 Miss. Admin. Code Pt. 3, R. 103 Rule 103

To the extent that a specific tax is deductible under both Federal and State Law, the Commissioner will follow Federal Rules, Regulations and Revenue Procedures relating to the tax treatment of the specific tax.

35 Miss. Admin. Code Pt. 3, R. 104 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 105 (Reserved)

Chapter 04 Depreciation

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35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

Reasonable Allowance. Section 27-7-17(1)(f) provides that a reasonable allowance for the exhaustion, wear and tear and obsolescence of property used in the trade or business or property held by the taxpayer for the production of income shall be allowed as a depreciation deduction. The allowance is that amount which should be set aside for the taxable year in accordance with a consistent plan, so that the aggregate of the amounts set aside will equal the cost or other basis of the property. The allowance shall not reflect amounts representing a mere reduction in market value. Mississippi will follow Federal depreciation guidelines as are not deemed contrary to the context and intent of Mississippi Law.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

The first year thirty-percent (30%) "bonus" depreciation as set forth in the Federal "Job Creation and Worker Assistance Act of 2002", H.R. 3090, does not constitute a reasonable allowance for the exhaustion, wear, and tear and obsolescence of the property in regard to which it is taken. This thirty-percent (30%) "bonus" depreciation is therefore not an allowable deduction for depreciation under Section 27-7-17(1)(f). Mississippi will not follow the Federal guidelines in regard to this "bonus" depreciation since such "bonus" depreciation is contrary to the context and intent of Mississippi Law. If such "bonus" depreciation is used for federal income tax reporting purposes, the tax basis of property will be different for Federal and State until such property is fully depreciated. 1. If such “bonus” depreciation is used for federal income tax reporting, each year an adjustment must be made for reporting depreciation to this State so as to reflect an amount of depreciation that would have otherwise been allowed using Federal depreciation guidelines other than that contained in H.R.3090 “Job Creation and Worker Assistance Act of 2002.” 2. If it is determined “bonus” depreciation was taken in any year and the proper State adjustment was not made in that same year, all allowances for depreciation will be denied on all tax returns that are within the statute of limitations until there is a full recovery to this State of excess depreciation deductions. When the Commissioner makes such adjustment, there shall be assessed, in addition to interest, all penalties on any underpayment of income tax to the extent provided by law.

35 Miss. Admin. Code Pt. 3, R. 102 Rule 102

Mississippi does not recognize the Federal tax credit allowed for qualified depreciable property acquired and placed in service during the tax year and does not require the taxpayer's basis in the property be reduced by 50% of the investment tax credit. This affects the computation of gain or loss upon disposition of the asset. In order for a taxpayer to maintain the same basis in property for both Federal and state purposes, for property placed in service after 1982, the taxpayer's basis in the property may be reduced by 50% of the investment tax credit as additional depreciation for Mississippi income tax purposes in the year the ITC is taken.

35 Miss. Admin. Code Pt. 3, R. 103 Rule 103

A taxpayer may elect to treat the cost of any Internal Revenue Code Section 179 property, which is not chargeable to a capital account as an expense. Cost so treated shall be allowed as a deduction for the taxable year in which the Section 179 property is placed in service. In determining the amount of allowable expense deduction in any taxable year, the Commissioner will follow Federal Rules, Regulations and Revenue Procedures issued

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under Section 179, Internal Revenue Code as are deemed not contrary to the context and intent of Mississippi Law.

35 Miss. Admin. Code Pt. 3, R. 104 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 105 (Reserved)

Chapter 05 Depletion

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

Section 27-7-17(1)(g) provides that there shall be allowed as a deduction in computing taxable income in the case of mines, oil and gas wells, other natural deposits and timber, a reasonable allowance for depletion and for depreciation of improvements, BASED UPON COST, including cost of development, not otherwise deducted, or fair market value as of March 16, 1912, if acquired prior to that date.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

In the case of standing timber, the depletion allowance shall be computed solely upon the adjusted cost basis of the property. In the case of other exhaustible natural resources, the allowance for depletion shall be computed upon either the adjusted cost basis of the property (cost depletion) or upon a percentage of gross income from the property (percentage depletion), whichever results in the greater allowance for depletion for any taxable year, but in no case shall the aggregate deductions for depletion allowance exceed the cost basis of the property. In no case will depletion based upon discovery value be allowed. Unless cost of mineral deposits can be definitely determined and substantiated, a depletion deduction will not be allowed. Depletion is allowable only in connection with actual production. A depletion deduction is not allowed on lease bonus or lease rental income.

35 Miss. Admin. Code Pt. 3, R. 102 Rule 102

For the purpose of this regulation, the regulations of the Internal Revenue Service shall be followed in computing the depletion allowance, except as stated above and in those cases where the Mississippi Law and the Federal Law are in conflict. The percentage depletion allowance authorized by the Federal Law may be used as a method of computing the depletion allowance for Mississippi tax purposes. However, in no instance shall the aggregate deduction for depletion exceed the cost basis of the property. Taxpayers having rights to natural resources located in this state and in other states shall confine their computation and deduction for depletion allowances to only those natural resources which produce income for Mississippi tax purposes.

35 Miss. Admin. Code Pt. 3, R. 103 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 104 (Reserved)

Chapter 06 Net Operating Loss

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

Taxpayers are allowed to carryover their net operating losses from a trade or business and deduct such loss in the next five succeeding years. The carryover is first to the year immediately following the loss year, then to the second year following the loss year, and so

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on until the loss is exhausted, not to exceed five years. In instances where more than one year's net operating loss is being carried over, the first year's loss must be carried over first until exhausted before the second year's loss may be carried over, and subsequent years' losses must be carried over in the same manner.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

Taxpayers entitled to the net operating loss carryover are: 1. Individuals 2. Corporations (Except for regulated investment companies, and life and mutual insurance companies other than marine). 3. Estates and trusts 4. Partners (to the extent of their allocable share of partnership net losses).

35 Miss. Admin. Code Pt. 3, R. 102 Rule 102

In order to qualify as an operating loss carryover under the provisions of Section 27-7-17(1)(l) of the Code, the loss to be carried over must have been incurred first; from sources within the boundaries of the State of Mississippi, or from sources within the jurisdictional boundaries of the Income Tax Laws of the State of Mississippi; and secondly, the loss must have been reported as such on an income tax return filed with the State of Mississippi for the year of the loss by the taxpayer claiming the loss carryover.

35 Miss. Admin. Code Pt. 3, R. 103 Rule 103

A net operating loss incurred by any taxpayer prior to becoming subject to the jurisdiction of the Mississippi Income Tax Laws will not be allowed as a loss carryover deduction.

35 Miss. Admin. Code Pt. 3, R. 104 Rule 104

Taxpayers who under applicable provisions of the statute are allowed or required to exclude income earned from sources outside of Mississippi, and taxpayers who are required to use formulas in determining Mississippi taxable net income shall determine Mississippi net operating losses in the same manner as Mississippi taxable net income is determined.

35 Miss. Admin. Code Pt. 3, R. 105 Rule 105

In making a claim for a net operating loss deduction, the taxpayer must file with its income tax return for the year of such deduction, a concise statement setting forth all material and pertinent facts related thereto; including a detailed schedule showing how the deduction was computed. If more than one net operating loss is being carried over, this schedule must be submitted for each loss year individually.

35 Miss. Admin. Code Pt. 3, R. 106 Rule 106

The Commissioner will follow Federal Rules, Regulations and Revenue Procedures to the extent they are deemed not contrary to the context and intent of Mississippi Law.

35 Miss. Admin. Code Pt. 3, R. 107 (Reserved) 108 (Reserved)

Chapter 07 Wage Tax Credits

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

Mississippi does not recognize federal regulations issued under Section 280 or 44B, IRC regarding tax credits allowed for work incentive programs or the employment of certain new employees. Deduction for wages paid should be computed without regard to the reduction for wage tax credits for Mississippi income tax purposes.

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35 Miss. Admin. Code Pt. 3, R. 101 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 102 (Reserved)

Chapter 08 Other Business Deductions

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

The Commissioner will follow Federal Rules, Regulations and Revenue Procedures relating to the following business deductions to the extent that such procedures are deemed not contrary to the context and intent of Mississippi Law. 1. Activities Not Engaged in for Profit - Hobby Losses 2. Amortizable Bond Premium 3. Amortization of Pollution Control Facilities 4. Bad Debts 5. Bonuses to Employees 6. Bribes and Kickbacks 7. Capital Contributions to Federal National Mortgage Association (F.N.M.A.) 8. Circulation Expenditures 9. Compensation for Personal Services 10. Cost of Materials 11. Decline in Value of Stock 12. Deduction for Discount on Bonds 13. Demolition of Buildings 14. Depreciation or Amortization of Improvements made by Lessee on Lessor's Property 15. Employee Benefits 16. Entertainment Expenses 17. Expenses and Interest Relating to Tax - Exempt Income 18. Excessive Compensation 19. Farmers' Expenditures for Clearing Land 20. Farmers' Expenditures for Fertilizer 21. Farming Expenses & Losses 22. Fines and Penalties 23. Interest Paid 24. Losses from Wash Sales of Stock or Securities 25. Obsolescence of Nondepreciable Property 26. Professional Expenses 27. Rentals 28. Repairs 29. Research and Experimental Expenditures 30. Soil and Water Conservation Expenditures 31. Trademark and Trade Name Expenditures 32. Traveling Expenses 33. Worthless Securities

35 Miss. Admin. Code Pt. 3, R. 101 (Reserved)

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35 Miss. Admin. Code Pt. 3, R. 102 (Reserved)

Chapter 09 Reforestation Tax Credit

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

Owner and Land Eligibility 1. An eligible owner may be a non-resident; however, eligible lands include only land located within the State of Mississippi. If one person as a life tenant holds property with remainder to another person, the life tenant is considered to be the eligible owner of the property that may qualify as eligible land for reforestation tax credit purposes. For purposes of this section, eligible lands shall not include leased property. Accordingly, a lessee cannot qualify as an eligible owner with respect to costs incurred for reforestation practices on leased land. 2. Land on which cost share assistance was received for a particular practice is not eligible for the reforestation tax credit for that practice, unless the eligible owner's adjusted gross income is less than the federal earned income credit level for that taxable year. The STC will determine the federal earned income credit level each year based on information provided by the Internal Revenue Service.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

Credit Limitations 1. When married taxpayers own eligible land jointly and implement a reforestation plan on that land, they are considered to be one taxpayer for purposes of applying the limitations on the amount of reforestation tax credit earned on that property. Each spouse may also qualify as an eligible owner, in their own right, (each being eligible for the maximum lifetime RTC of $10,000) provided that each spouse individually had qualified expenditures on eligible land which followed a certified reforestation plan. When each spouse qualifies as an eligible owner, and a reforestation tax credit was earned on eligible land owned jointly by the spouses, each spouse will be considered to have earned one-half of the reforestation tax credit with respect to the jointly owned property/properties. When married taxpayers file jointly and each spouse qualifies for the reforestation tax credit, each spouse must file a separate RTC form to claim their respective reforestation tax credit. In computing their respective reforestation tax credit on their individual RTC form, each spouse must use one-half of the total income tax liability reflected on the combined return and one-half of the total amount of all other credits available to be claimed on the joint return. 2. In the case of a pass-through entity (partnership or S Corporation), the maximum qualifying expenditure ($20,000) giving rise to the maximum $10,000 lifetime reforestation tax credit shall be applied at both the pass-through entity level and at the investor (partner or shareholder) level. The maximum $10,000 reforestation tax credit earned by the pass-through entity is allocated to each investor, partner or shareholder based on their ownership interest. 3. Where more than one person has an undivided ownership interest in eligible land, and two or more of the interest holders implement a reforestation plan on that land, for purposes of this section, the project will be considered a joint venture and treated in the same manner as a partnership. Accordingly, the joint venture will be

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considered the eligible owner and the maximum qualifying expenditure limitation shall be applied at the joint venture level as in other pass-through entity situations.

35 Miss. Admin. Code Pt. 3, R. 102 Rule 102

Applications 1. For purposes of computing eligible costs on which the RTC is computed, total expenditures made during the taxable year on all eligible acres must be reduced by the amount of any cost-sharing proceeds received from federal and/or state forestry incentives programs with respect to such eligible acres. 2. Reforestation costs generally must be capitalized and included in the adjusted basis of the qualified timber property. Any reforestation costs incurred and paid during a tax year must be reduced by the amount of any federal and/or state cost-sharing proceeds received, and the adjusted basis of the property decreased accordingly. If the taxpayer claims investment tax credit and reforestation amortization deductions with respect to qualifying reforestation expenditures for Federal income tax purposes, the basis of the qualified timber property (for State purposes) shall first be reduced by 50% of the federal investment tax credit. In addition, the adjusted basis of the property must be reduced by 100% of the reforestation tax credit earned with respect to that property. With respect to the property on which the Federal investment tax credit and reforestation amortization deductions are claimed, amortization for State purposes may be claimed on the portion of the qualifying state reforestation expenditures (after being reduced by the Federal investment tax credit adjustment and the RTC earned) which exceeds the basis of the Federal qualifying reforestation expenditures (after being reduced by the Federal investment tax credit adjustment and the Federal amortization to be claimed.) Amortization for state purposes is to be computed in the same manner as for Federal purposes.

35 Miss. Admin. Code Pt. 3, R. 103 Rule 103

Verification and Certification 1. The RTC is based on eligible expenditures made during each taxable year (as limited in the statute) for seedlings, seed/acorns, seeding, planting by hand or machine, site preparation, and post-planting site preparation on all eligible acres. When an approved reforestation practice, as defined in the statute, is completed in the taxable year, the RTC may be computed and claimed with respect to all of the eligible costs of the completed practice. Verification by a qualified forester that the reforestation practice(s) were completed and that the reforestation prescription or plan was followed is required in order to claim the reforestation tax credit. A determination must be made on a year by year basis to determine if the costs incurred during that year are eligible expenditures for approved reforestation practices for eligible tree species on eligible lands. The fact that expenditures made under a prescription or plan during one year do not qualify (for example: some cost share assistance was received and the taxpayer's adjusted gross income exceeded the federal earned income credit level) does not mean that expenditures made under the same prescription or plan in the subsequent or prior year would not qualify for the credit (for example: some cost share assistance was received in the subsequent year, but, in that year, the taxpayer's adjusted gross income was less than the federal earned income credit level). In the event that RTC is earned with respect to a practice completed during a taxable year, and the overall prescription or plan is, for

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any reason, not subsequently completed in its entirety, any RTC previously earned must be recaptured in full. 2. When a pass-through entity (generally, a partnership or S Corporation) is the eligible owner and makes expenditures qualifying for the RTC, the credit is passed through to the investors who may utilize the credit to offset all or a portion of their income tax liability. The Schedule K-1 issued by the pass-through entity to the investor should indicate the investor's allocated RTC. Also, a copy of the pass- through entity's RTC form containing the certification of a qualified forester as required by the statute, should be furnished to the investor to substantiate his claim for the credit on his income tax return. A copy of the RTC form provided by the pass-through entity should be attached to the investor's RTC form prepared and filed with the investor's income tax return. Regulation 803 provides that 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. Similar restrictions are implied with respect to income tax credits allowed to partnerships and other pass-through entities which are passed on to their investors. Notwithstanding this statement in Regulation 803 and the similar implied restrictions relating to partnerships and other pass-through entities, the reforestation tax credit received from pass-through entities may, subject to the limitations stated in Section 27-7-22.15, be used by investors to offset all or a portion of their income tax liability.

35 Miss. Admin. Code Pt. 3, R. 104 Rule 104

Record Keeping Since the RTC may be carried forward and claimed until such time as 100% of the credit is utilized, the taxpayer must maintain appropriate records to substantiate the amount of the credit earned, by year, up to the maximum lifetime $10,000 credit; copies of the reforestation prescription(s) or plan(s); copies of the RTC forms containing the signature of the forester certifying the completion of the prescription or plan; and copies of all RTC forms filed so that the utilization of the credit against tax liability can be verified. When claiming RTC carried over from an earlier year or years, a copy of the RTC form containing the original certification of a qualified forester for the tax year in which the RTC was earned should be attached to the RTC form filed for the current year. Recordkeeping is extremely important since failure to adequately document the credit may result in the disallowance of the credit claimed.

35 Miss. Admin. Code Pt. 3, R. 105 Rule 105

Other In order to provide statistical information concerning the participation in reforestation activities, a copy of the "Reforestation Tax Credit - Cost Worksheet" (page 2 only of each RTC form filed), must be mailed to the Mississippi Forestry Commission at the address shown on the form.

35 Miss. Admin. Code Pt. 3, R. 106 Rule 106

Example 1 During taxable year 1, Taxpayer incurs qualifying reforestation costs in the amount of $15,000. All of the costs incurred qualify for federal investment credit and reforestation amortization and for the Mississippi reforestation tax credit. The taxpayer elects to claim the investment tax credit and to amortize the maximum expenditure ($10,000) for federal

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tax purposes. Taxpayer also claims a reforestation tax credit of $7,500 ($15,000 X 50%) for Mississippi tax purposes. The taxpayer must make the following basis adjustments and is entitled to reforestation amortization deductions for both federal and state purposes as shown below:

Year Item Amortization Basis Federal State

Qualifying Reforestation Costs $15,000 $15,000 Investment Credit (Federal) -500 -500 Reforestation Tax Credit Earned -7,500 Remaining Basis 14,500 7,000 Federal Amortization to be Claimed 9,500 Remaining Basis After Federal Amortization 5,000 -5,000 State Amortization to be Claimed 2,000

1 Amortization: $9,500/84 = 113 x 6 months 679 Amortization: $2,000/84 = 24 x 6 months 142 2 Amortization: $9,500/84 = 113 x 12 months 1,357 Amortization: $2,000/84 = 24 x 12 months 286 3 Amortization: $9,500/84 = 113 x 12 months 1,357 Amortization: $2,000/84 = 24 x 12 months 286 4 Amortization: $9,500/84 = 113 x 12 months 1,357 Amortization: $2,000/84 = 24 x 12 months 286 5 Amortization: $9,500/84 = 113 x 12 months 1,357 Amortization: $2,000/84 = 24 x 12 months 286 6 Amortization: $9,500/84 = 113 x 12 months 1,357 Amortization: $2,000/84 = 24 x 12 months 286 7 Amortization: $9,500/84 = 113 x 12 months 1,357 Amortization: $2,000/84 = 24 x 12 months 286 8 Amortization: $9,500/84 = 113 x 6 months 679 Amortization: $2,000/84 = 24 x 6 months 142

Adjusted Basis (After federal amortization period) $5,000 $5,000

35 Miss. Admin. Code Pt. 3, R. 107 Rule 107

Example 2 During year 1, Taxpayer has a reforestation prescription prepared which includes site preparation, planting seedlings by machine, and post-planting site preparation, on a 100 acre plot of land. In the fall of year 1, site preparation work was completed at a cost of $12,500. In the spring of year 2, planting of the seedlings was completed at a cost of $6,400. Later in year 2, post-planting site preparation was performed at a cost of $4,000, completing all of the reforestation practices contained in the prescription. For year 1, Taxpayer has eligible expenditures of $12,500. Upon certification by a qualified forester that site preparation work was completed and that the reforestation prescription was followed, Taxpayer may determine the amount of RTC earned for year 1. For year 2, Taxpayer has eligible expenditures of $10,400. Upon certification by a qualified forester

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that the prescription practices were completed and that the reforestation prescription was followed, Taxpayer may determine the amount of RTC earned for year 2. A RTC Form must be filed for each year covering the practices completed and each RTC Form must be signed by a qualified forester certifying that the practices were completed in accordance with the prescription or plan. In the event that Taxpayer chooses not to complete the prescription plan in Year 2 and uses the property for other purposes, the RTC earned in year 1 must be recaptured.

35 Miss. Admin. Code Pt. 3, R. 108 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 109 (Reserved)

Subpart 06 Losses

Chapter 01 Casualty Losses of Individuals

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

A casualty loss is a loss due to some sudden, unexpected or unusual event. Casualty losses include losses caused by fire, storm, shipwreck, hurricane, flood, quarry blast, vandalism, sonic boom, earthquake or earth slide.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

For the purpose of this regulation, a "disaster loss" is a casualty loss that occurs from an event in an area that the President of the United States declares as a disaster area warranting Federal assistance.

35 Miss. Admin. Code Pt. 3, R. 102 Rule 102

Mississippi Law differs from Federal Law in the carryback and carryover provisions. Normally, casualty losses must be used in the year of occurrence. An exception to this is a disaster loss as defined above. Disaster losses may be carried back 3 years and carried forward 7 years. Casualty losses that occurred to property used in a trade or business do not qualify as a disaster loss. For treatment of these losses, see the regulation on casualty losses incurred in a trade or business.

35 Miss. Admin. Code Pt. 3, R. 103 Rule 103

The amount of a casualty loss shall be computed the same for Mississippi purposes as for Federal purposes. Each separate casualty, theft and disaster loss in excess of $100.00 is deductible to the extent that the total losses after the $100.00 deduction per loss exceeds 10% of adjusted gross income.

35 Miss. Admin. Code Pt. 3, R. 104 Rule 104

Disaster losses are computed the same way with certain limitations. In the year of the loss, for the carryback or carryover computations, a taxpayer may not deduct his personal exemptions, a disaster loss carryback or carryover from another year, or a net operating loss deduction from another year. The carryback and carryover amount is limited to the net disaster loss after the computation in the preceding paragraph.

35 Miss. Admin. Code Pt. 3, R. 105 Rule 105

A disaster loss occurring after the end of the taxpayer's filing year, but before the due date of the return, may deduct such loss on the aforementioned return. The order of carryback and carryover is as follows: 1. Third preceding taxable year;

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Second preceding taxable year; 3. First preceding taxable year; 4. First succeeding taxable year; 5. Second succeeding taxable year; 6. Third succeeding taxable year; 7. Fourth succeeding taxable year; 8. Fifth succeeding taxable year; 9. Sixth succeeding taxable year; and 10. Seventh succeeding taxable year.

35 Miss. Admin. Code Pt. 3, R. 106 Rule 106

Example. In March, 1986, the taxpayer suffers a casualty loss from the flooding of his personal residence. The casualty sustained is $80,000, computed in accordance with provisions of the Internal Revenue Code, Rules, Regulations and Revenue Procedures. The taxpayer elects to deduct the loss on his return for the preceding year. The original 1985 return reveals the following data:

Husband Wife Net Income (Adjusted Gross Income) $30,000.00 $15,000.00 Itemized Deductions: Medical Expenses $ 400.00 Taxes 1,500.00 Misc. Deductions 100.00 Interest Expense 3,500.00 Contributions 2,000.00 7,500.00 .00 Balance 22,500.00 15,000.00 Personal Exemption Married 9,500.00 Dependents (2 Children) 3,000.00 7,500.00 5,000.00 Taxable Income 15,000.00 10,000.00 Tax Due $ 950.00 $ 600.00 $ 350.00 Computation of Net Casualty Loss—Form 62-170—Amended Return Return For 1985 Taxable Income Before Personal Exemption: $22,500.00 $15,000.00 Casualty Loss $80,000.00 Per Casualty Deductible ( 100.00) 10% AGI Limitation ( 4,500.00) 60,400.00 15,000.00 Net Casualty Loss $37,900.00 $ .00 Refund Due Taxpayers $950.00 Application of Net Casualty Loss. 1982 Return Gross Income $25,000.00 $10,000.00 Net Casualty Loss Balance from 1985 (27,900.00) (10,000.00) Balance $ (2,900.00) $ ( .00)

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35 Miss. Admin. Code Pt. 3, R. 1983 Rule 1983

Return—Gross Income $25,000.00 $10,000.00 Net Casualty Loss Balance from 1982 ( 2,900.00) .00 1983 Gross Income after Carryback $22,100.00 $10,000.00 Note that a net casualty loss carryback or carryover is deducted from gross income (before itemized deductions and personal exemption.)

35 Miss. Admin. Code Pt. 3, R. 107 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 108 (Reserved)

Chapter 02 Casualty Losses Incurred in a Trade or Business

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

Except as otherwise provided, any loss arising from fire, storm, shipwreck or other casualty is allowable as a deduction for the taxable year in which the loss is sustained.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

In determining the amount of loss deductible under this regulation, the fair market value of the property immediately before and immediately after the casualty shall generally be ascertained by competent appraisal. This appraisal must recognize the effects of any general market decline affecting undamaged as well as damaged property which may occur simultaneously with the casualty, in order that any deduction under this regulation shall be limited to the actual loss resulting from damage to the property.

35 Miss. Admin. Code Pt. 3, R. 102 Rule 102

In the case of property which originally was not used in the trade or business or for income-producing purposes and which is thereafter converted to either of such uses, the fair market value of the property on the date of conversion, if less than the adjusted basis of the property at such time, shall be used, after making proper adjustments in respect of basis, as the basis for determining the amount of loss.

35 Miss. Admin. Code Pt. 3, R. 103 Rule 103

The amount of loss to be taken into account for purposes of this regulation shall be the lesser of either: 1. The amount which is equal to the fair market value of the property immediately before the casualty reduced by the fair market value of the property immediately after the casualty; or 2. The amount of the adjusted basis for determining the loss from the sale or other disposition of the property involved.

35 Miss. Admin. Code Pt. 3, R. 104 Rule 104

However, if the property used in a trade or business or held for the production of income is totally destroyed by casualty, and if the fair market value of such property immediately before the casualty is less than the adjusted basis of such property, the amount of the adjusted basis of such property shall be treated as the amount of the loss.

35 Miss. Admin. Code Pt. 3, R. 105 Rule 105

A casualty loss incurred in a trade or business for profit shall be determined by references to the single, identifiable property damaged or destroyed. Thus, for example, in determining the fair market value of the property before and after the casualty in a case where damage by casualty has occurred to a building and ornamental trees used in a trade

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or business, the loss is computed separately for the building and separately for the trees. This rule does not apply to non-business property.

35 Miss. Admin. Code Pt. 3, R. 106 Rule 106

Casualty losses incurred in a trade or business are not subject to the $100 floor, however, where property is used partially for business and partially for personal purposes, the $100 floor would apply to the portion of the property used for personal purposes. Casualty losses to property connected with a trade or business may be deducted in the taxable year in which the loss occurred. Such business casualty loss may give rise to a "net operating loss" deduction for the taxable year; however, a casualty loss to property used in a trade or business does not give rise to a "net operating loss" deduction as provided for individuals.

35 Miss. Admin. Code Pt. 3, R. 107 Rule 107

For rules relating to net operating loss carryovers, see regulation on net operating losses.

35 Miss. Admin. Code Pt. 3, R. 108 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 109 (Reserved)

Subpart 07 Individuals

Chapter 01 Residents

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

The term "resident" includes natural persons domiciled in this state for other than temporary or transitory purposes or natural persons who maintain a legal or actual residence within this state. All other individuals are nonresidents.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

Domicile is the place where an individual lives and has his permanent home and principal establishment, and to which he has the intention of returning whenever he is absent. Actual residence may or may not necessarily mean domicile, for domicile is the fixed place of abode which in the intention of the taxpayer is permanent rather than transitory. It is the place in which an individual has voluntarily fixed the habitation of himself and his family, not for a special or limited purpose, but with the present intention of making a permanent home, until some unexpected event shall occur to induce him to adopt some other permanent home. A domicile once established continues until a new domicile is established through the intent and purpose of establishing, and the actual establishment, of a new domicile coupled with the abandonment of the old. Every person has one and only one domicile. What constitutes domicile is a question of fact rather than of law, frequently depending on a variety of circumstances. The Commissioner may require of an individual claiming domicile outside the State of Mississippi a statement of information with respect to the particular case. 102 An individual who maintains a home, apartment or other place of abode in Mississippi, or who exercises the rights of citizenship in Mississippi by meeting the requirements as a voter or who enjoys the benefits of homestead exemption, is a legal resident of the State of Mississippi and remains a resident although temporarily absent from the state for varying intervals of time. A person may, therefore, be living without Mississippi and still be a legal resident of Mississippi for tax purposes. If an individual establishes the status of a legal resident of Mississippi, he retains that status until such time as such individual takes

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positive action to establish legal residence in some other state or country and relinquishes his rights and privileges of residency in Mississippi.

35 Miss. Admin. Code Pt. 3, R. 103 Rule 103

Every natural person who, though not necessarily a legal resident of Mississippi, nevertheless resides within this state on a more or less regular or permanent basis and not on the temporary or transitory basis of a visitor or sojourner, is defined as an actual resident of this state for income tax purposes.

35 Miss. Admin. Code Pt. 3, R. 104 Rule 104

If an individual is simply passing through this state on his way to another state or country or is here for a brief rest or vacation or to complete a particular transaction or fulfill a particular engagement, which will require his presence in this state but for a short period of time, he is in this state for temporary or transitory purposes and will not be considered to be a resident or domiciled here by virtue of his presence within the state. If an individual is in this state to improve his health, and his illness is of such character as to require a relatively long or indefinite period to recuperate or is here for business purposes which will require a long or indefinite period to accomplish or is employed in a position that may last permanently or indefinitely or is retired from business and moves to Mississippi with no definite intention of leaving shortly thereafter or is otherwise physically present in this state for an indefinite period of time, such individual is domiciled in Mississippi, and taxable upon his entire net income, even though such person may retain his legal residence in some other state or country. As to whether an individual is in a temporary or transitory situation will depend to a large extent upon the facts and circumstances of each particular case.

35 Miss. Admin. Code Pt. 3, R. 105 Rule 105

An actual or legal resident of Mississippi who accepts temporary employment in another state or country or who may travel extensively abroad or who may accept a temporary teaching assignment in another state or foreign country or who may otherwise leave the state with intentions, at the time of departure, of returning to this state, remains a resident of this state during the period of his absence from the state. An individual, however, who moves to another state or to a foreign country with no intentions, at the time of departure, of returning to Mississippi, and who surrenders all rights and privileges as a resident of this state, ceases to be a resident of the state from the date of his departure.

35 Miss. Admin. Code Pt. 3, R. 106 Rule 106

A resident of Mississippi, who is employed in an occupation that has a periodic work schedule and the work location is outside of the State of Mississippi, is required to file a Mississippi resident return. An example of this is an offshore oilfield worker whose work schedule is seven (7) days on and seven (7) days off. If this individual resides in Mississippi during the seven days off period, he is required to file a Mississippi resident return. If the employer is not required to withhold Mississippi income tax, or does not withhold Mississippi income tax, then the employee would be subject to making estimated income tax payments. See the estimated payments regulation for requirements on who must make estimated payments. If the work location is in another state, then the taxpayer may be allowed to take a tax credit for tax paid to the other state, if the taxpayer filed a return with the other state.

35 Miss. Admin. Code Pt. 3, R. 107 (Reserved)

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35 Miss. Admin. Code Pt. 3, R. 108 (Reserved)

Chapter 02 Part-Year Resident

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

A taxpayer, who is not liable for Mississippi income tax for an entire year because of moving into this state or moving from this state, shall include on his return income received from all sources during the time he is a resident of Mississippi, plus income from all sources within Mississippi for the taxable year while a nonresident of Mississippi.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

Deductions of a personal nature such as authorized individual non-business itemized deductions, the optional standard deduction and the personal and additional exemptions allowed, shall be allowed only in the ratio that reported Mississippi net income bears to the taxpayer's total net income from all sources for the entire year. In the case of married individuals, the term "taxpayer's total net income" means the total net income of both husband and wife.

35 Miss. Admin. Code Pt. 3, R. 102 Rule 102

Moving expense reimbursement is included both in Mississippi and total income if the taxpayer is moving into Mississippi and is included in total income only if moving outside Mississippi.

35 Miss. Admin. Code Pt. 3, R. 103 Rule 103

If a taxpayer moves to Mississippi, his payment to an IRA may be deducted from Mississippi income as well as total income (to the extent such payment is deductible for Federal income tax purposes).

35 Miss. Admin. Code Pt. 3, R. 104 Rule 104

If a taxpayer moves outside Mississippi, he may deduct an IRA payment from his total income only.

35 Miss. Admin. Code Pt. 3, R. 105 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 106 (Reserved)

Chapter 03 Nonresidents

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

The term "nonresident" includes those natural persons not meeting the requirements of a resident. A nonresident individual shall be allowed the same personal and additional exemptions as are authorized for resident individuals; however, the nonresident individual is entitled only to that proration of the personal and additional exemptions as his adjusted gross income from sources within the State of Mississippi bears to his total or entire adjusted gross income from all sources. 101 A nonresident individual who is married and whose spouse has income from independent sources must declare the joint income of himself and his spouse from sources within and without Mississippi, and claim as a personal exemption that proportion of the authorized and additional exemptions which the total adjusted gross income from Mississippi sources bears to the total adjusted gross income of both spouses from all sources.

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35 Miss. Admin. Code Pt. 3, R. 102 Rule 102

In the case of married individuals where one (1) spouse is a resident and the other is a nonresident, the personal exemption of the resident individual shall be prorated on the same basis as if both were nonresidents having net income from within and without the State of Mississippi.

35 Miss. Admin. Code Pt. 3, R. 103 Rule 103

Nonresidents, foreign corporations, and citizens of foreign countries, shall include as gross income from sources within the state, all income derived from services rendered, business done, or property located within the state.

35 Miss. Admin. Code Pt. 3, R. 104 Rule 104

The income of a nonresident who is assigned to a business location in this state or who draws a salary, fee, commission or other income for work performed at or from a Mississippi location and who regularly travels to such location is considered income derived from services rendered in this state and such income shall be allocated to this state.

35 Miss. Admin. Code Pt. 3, R. 105 Rule 105

A nonresident of Mississippi may deduct an IRA payment from total income only. In the case of married individuals, if both spouses work and both have an IRA, calculate each spouse's deduction separately.

35 Miss. Admin. Code Pt. 3, R. 106 Rule 106

A nonresident individual, who is a member of a partnership owning property or doing business in the State of Mississippi, is taxable on his share of the net income of the partnership, whether distributed or not. If the partnership does business within and without the state, a nonresident partner is taxable on such share of his income, whether distributed or not, as is assignable to Mississippi.

35 Miss. Admin. Code Pt. 3, R. 107 Rule 107

Unless a nonresident or foreign taxpayer files with the Commissioner the complete return required of him, then no deductions or exemptions will be allowed to such taxpayer by the Commissioner in computing such taxpayer's taxable income. Supporting schedules are required for any adjustments, deductions, exemptions, or credit.

35 Miss. Admin. Code Pt. 3, R. 108 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 109 (Reserved)

Chapter 04 Military

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

Section 574 of the Soldiers and Sailors Civil Relief Act provides that military duty pay can be taxed only by the state in which the armed forces member is domiciled or is a legal resident. A Mississippi resident who enters the military service remains a resident of this state during the tenure of military service or until such time as legal and positive action is taken to establish residence in some other state and the personnel records are changed accordingly by executing through his or her command a state of Legal Residence Certificate, Department of Defense Form DD 2058.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

A member of the Armed Forces who claims Mississippi as his or her state of legal residence/domicile is subject to Mississippi income tax on his or her total gross income, regardless of the source of the income and regardless of where the member is stationed in

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the line of duty. If the spouse of a resident member is also a legal resident of Mississippi, he or she must also report total income to Mississippi, regardless of where earned. A tax credit is allowed for income taxes paid to another state on nonmilitary income earned in another state. Mississippi resident individual income tax return, Form 62-100 must be filed by a resident member on or before April 15, following the close of the calendar year.

35 Miss. Admin. Code Pt. 3, R. 102 Rule 102

A nonresident member of the Armed Forces stationed in Mississippi who realizes income from nonmilitary sources within the state or whose resident or nonresident spouse realizes income within the state is subject to the requirements of filing a Mississippi nonresident individual income tax return, Form 62-200. A Mississippi nonresident income tax return is also required in the case of a resident member of the Armed Forces whose spouse is a nonresident of Mississippi. In the above cases concerning nonresidents, only the nonmilitary income earned in Mississippi and the total income earned by a Mississippi resident would be reported as Mississippi income; however, the total income of both taxpayers must be reflected on the nonresident form in order to properly prorate the allowable exemptions and deductions.

35 Miss. Admin. Code Pt. 3, R. 103 Rule 103

The pay of military personnel employed by Non-appropriated Fund Instrumentalities such as post exchanges, military stores, officers' clubs and other such instrumentalities was declared by the Department of Defense to be off-duty or nonmilitary pay taxable and reportable in the same manner as for civilian employees of NAFI's. Military pay of members of the Armed Forces who claim Mississippi as their state of legal residence/domicile and the pay of members from NAFI sources in Mississippi are subject to the requirements of Mississippi income tax withholding.

35 Miss. Admin. Code Pt. 3, R. 104 Rule 104

Members of the United States Armed Forces generally include in income the same items as civilians. The following list of taxable and nontaxable items of income and deductible items of expense is intended to serve as a guide in answering questions frequently encountered by the taxpayer and is not to be considered as all inclusive. 1. Taxable Items: Compensation for service in the Armed Forces: a. Mileage allowance (less expenses for self) b. Bonus paid for re-enlistment c. Service pay d. Voluntary allotments e. Interest on G. I. life insurance dividends left on deposit with the Veterans Administration f. Payments received from a former employer g. Retirement pay 2. Not Taxable: a. Benefit payments received under federal laws relating to veterans. b. Benefit payments received under the G. I. Bill. c. Cash received in lieu of subsistence and quarters. d. Combat pay -- Enlisted members of the Armed Forces may exclude from gross income all pay received for any month during which they served in a combat zone, and officers may exclude up to $500 per month.

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e. Commutation of quarters. f. Compensation earned while a prisoner of war, missing in action or detained status. g. Disability pay—Disability pay is excluded unless it is in effect early retirement caused by a disability and is based on the employee's age or length of service. This applies even if the employee's retirement is caused by an occupational injury or sickness. h. Family allowances to spouses or dependents. i. Reimbursement by the government for moving family and household effects on a change of official station for permanent duty. j. Subsistence. k. Allowances for uniforms. l. Widows' pensions received from the Veterans Administration. 3. Deductible Items: a. Cap and corp devices, campaign bars aiguilletes, epaulets and chin straps. b. Local transportation expenses of reservists (limited) unreimbursed travel and transportation expenditures in the course of employment. 4. Not Deductible: a. Damage to household furnishings in moving b. Dues to officers' club c. Expenses of visiting home d. Living expenses of a naval officer stationed in one locality. e. Lodging and meals on permanent overseas assignment or while permanently assigned to a ship. f. Naval officers' subsistence expenses in excess of the allowance while on permanent duty afloat. g. Uniform expenses where the uniform takes the place of ordinary clothing.

35 Miss. Admin. Code Pt. 3, R. 105 Rule 105

Exclusions from Gross Income 1. Retirement Income—Armed Forces: a. Retirement allowances received by a retired member of the Armed Forces, including the National Guard and Military Reserve, not based on disability, must be included in gross income to the extent of income from retirement pay, annuities and pensions that exceeds the sum of six thousand dollars ($6,000) for the taxable year. Income from retirement allowances, pensions and annuities up to $6,000 for each taxable year may be excluded from gross income. b. The amount of reduction in retirement pay of a retired member of the Armed Forces representing contributions to a Retired Serviceman's Family Protection Plan (10 U.S.C. 1431) or a Survivor Benefit Plan (10 U.S.C. 1447) must be included in gross income for the taxable year in which the contribution or reduction is made for Mississippi income tax purposes. The total retirement allowances, annuities or pensions are subject to the $6,000 exclusion. Mississippi Law does not conform with Section 122, IRC, with respect to the exclusion from gross income of the amount by which the

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retirement or retainer pay of a member or former member of the uniformed services is reduced in order to provide a survivor benefit. c. Upon the death of a member or former member of the uniformed services, where the "consideration for the contract" (cost basis of the annuity) has not been excluded in whole or in part from gross income for Mississippi income tax purposes, the survivor of such member who is receiving an annuity shall exclude from gross income such annuity payments equaling "consideration for the contract" (cost basis of the annuity) not previously excluded from gross income by the member or former member of the uniformed services. The $6,000 retirement income exclusion is also available to the spouse or other beneficiary at the death of the primary retiree. 2. National Guard and Reserve Pay: Compensation received by a member of the National Guard or Reserve Forces of the United States for inactive duty training (monthly or special drills or meetings), active duty training (summer camps, special schools, cruises) and for state active duty (emergency duty) must be included in gross income to the extent such pay is in excess of six thousand dollars ($6,000) for the taxable year. National Guard and Reserve pay up to $6,000 for each taxable year may be excluded from gross income. The exclusion does not apply to compensation or wages of full-time uniformed employees of the National Guard or Reserve Forces, nor does the exclusion apply to the wages of other employees such as secretaries, clerks, technicians, laborers, equipment operators or staff personnel.

35 Miss. Admin. Code Pt. 3, R. 106 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 107 (Reserved)

Subpart 08 Corporations

Chapter 01 Liquidations and Distributions

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

Effects on Corporation: 1. Distributions of the property of a corporation, including partial and complete liquidations, shall be recognized by the distributing corporation and the gain or loss shall be computed on the difference of the fair market value of the assets distributed and their basis. The above would be applicable to a subsidiary liquidating into a parent unless the parent assumes the same basis that was on the books of the subsidiary. If the parent assumes a basis different from that on its subsidiary's books, then the gain would be recognized on the excess amount placed on the parent's books over the amount recorded on the subsidiary's books. A corporation shall also recognize any gain on the sale of its assets in a partial or complete liquidation, the gain recognized being the difference in the cash and fair market value of property received less the basis of the property given up. 2. A gain or loss will be recognized in the year of the sale of the assets, or if a distribution of assets, in the year of the distribution. A corporation that distributes property over two taxable years must report the gain or loss in each year the

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distribution is made. The distributing corporation may not elect an installment basis for reporting the sale of its assets. 3. A tax credit is allowed to the shareholders for the tax paid by the corporation on the distribution. This credit to each shareholder is determined by the ratio of the percentage of shares owned by the shareholder to the total number of shares relinquished for the property, applied against the tax paid on the distribution gain by the distributing corporation. 4. The corporation shall provide the State Tax Commission a list of all shareholders with their percentage of ownership, distribution, tax credit allowed, and identification number on Form 62-465. The corporation shall also provide to the shareholder their percentage of ownership, distribution, tax credit allowed, and identification number.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

Effect on Shareholders: 1. Shareholders shall report any distribution by the corporation to them at its fair market value. The basis of any stock surrendered shall be applied against and reduce any gain on the property received. Gain shall be reported by the shareholder on the difference between the basis of the shareholder and the fair market value of the property received. 2. A credit for the tax paid by the distributing or liquidating corporation from the gain of the sale or gain on the distribution of property will be apportioned to each shareholder. The shareholder should attach Form 62-465, that has been furnished by the corporation, to his income tax return to be allowed credit for the tax paid by the corporation. A shareholder who receives an installment note in return for the surrender of a portion or all of his stock may report his gain on the installment method; however, the credit for tax paid by the distributing corporation is only allowed in the year the property is distributed to the shareholder. The credit is applied against, but limited to, the tax liability from this gain reported by the shareholder and none of the credit may be refunded. A loss must be reported in the year of distribution to the shareholder. 3. Distributions received by one corporation in complete liquidation of another corporation are treated as full payment in exchange for stock in the other corporation. Gain realized to the shareholder corporation from the distribution is recognized and shall be treated as ordinary income. A loss sustained is deductible in full in the tax year of the distribution.

35 Miss. Admin. Code Pt. 3, R. 102 Rule 102

State 338 Election: 1. Seller elects 338 [338h(10)]. a. Corporations that elect a Section 338 sale of assets for Federal tax purposes must also make a similar election for Mississippi tax purposes. The treatment of the election will be different for Mississippi in that the subsidiary corporation must report any gain as if it distributed assets in liquidation to the parent and the parent will report gain on the disposition of its stock as if the subsidiary is liquidated. The subsidiary will increase the bases of its assets by gain reported.

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b. Tax paid by the subsidiary on the gain from the increase in basis can be used by the parent as a tax credit to offset tax due on gain from the disposal of the subsidiary's stock. The parent cannot use the tax credit for tax paid on the increase in basis by the subsidiary to offset tax due from any other activity. Additionally, the tax credit cannot be carried forward or refunded. 2. Purchaser elects 338. A Corporation that elects a Section 338 Purchase of assets for Federal Tax purposes in which the corporation purchases at least 80% of the stock of another corporation and treats this purchase as a purchase of assets must make a similar election for Mississippi tax purposes. The subsidiary which has been purchased shall report any gain on the increase in the basis of its assets.

35 Miss. Admin. Code Pt. 3, R. 103 Rule 103

Stock Sale Treated as Asset Sale: 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.

35 Miss. Admin. Code Pt. 3, R. 104 Rule 104

Liquidation of a Subsidiary Into a Parent: 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.

35 Miss. Admin. Code Pt. 3, R. 105 Rule 105

Spin-Offs: 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

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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.

35 Miss. Admin. Code Pt. 3, R. 106 Rule 106

Collapsible Corporations: 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. 107 Partial liquidation defined: 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

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c. occurs within the taxable year in which the plan is adopted or within the succeeding taxable income.

35 Miss. Admin. Code Pt. 3, R. 108 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 109 (Reserved)

Chapter 02 Reorganizations

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

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.

35 Miss. Admin. Code Pt. 3, R. 101 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 102 (Reserved)

Chapter 03 Election of Certain Small Business Corporations—(S Corporations)

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

Definitions: 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.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

Conformity with Internal Revenue Code. 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.

35 Miss. Admin. Code Pt. 3, R. 102 Rule 102

Election by S corporation. An S corporation having made a valid election for Federal income tax purposes must make a similar election for Mississippi income tax purposes. The granting of the election for Mississippi purposes is contingent upon the granting and approval of the election for Federal purposes. Such election shall be filed with the State Tax Commission within 60 days of the date filed for Federal purposes. The prescribed form

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shall contain, in addition to any required information, a consent statement from each shareholder of the corporation.

35 Miss. Admin. Code Pt. 3, R. 102.01 Rule 102.01

Termination of an election for Federal purposes shall automatically terminate the election for Mississippi purposes.

35 Miss. Admin. Code Pt. 3, R. 103 Rule 103

Corporation undistributed taxable income taxed to shareholders. 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. 3. A transferee shareholder is considered to be the owner of stock on the day it is transferred. 4. In years in which there is no change in shareholders or in the relative interest of those shareholders, a shareholder's pro rata share of an item is simply the annual amount of that item multiplied by the shareholder's percentage of total stock outstanding.

35 Miss. Admin. Code Pt. 3, R. 104 Rule 104

Net Operating losses involving S corporations. 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. b. Time for determining basis of stock and indebtedness. The adjusted basis of the stock of, or indebtedness to, a shareholder for purposes of the limitation

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in (a) above is determined as of the close of the taxable year of the corporation, except that i. the adjusted basis of stock which is sold or otherwise disposed of during the taxable year of the corporation is determined as of the close of the day before the day of such sale or other dispositions, and ii. If the shareholder is not a shareholder as of close of the taxable year of the corporation, the adjusted basis of any indebtedness of the corporation to the shareholder is determined as of the close of the last day which he was a shareholder in such taxable year. 3. A shareholder is not allowed to deduct any loss attributable to the corporation prior to electing an S corporation status.

35 Miss. Admin. Code Pt. 3, R. 105 Rule 105

Special rules application to capital gains. 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.

35 Miss. Admin. Code Pt. 3, R. 106 Rule 106

Adjustments to the basis of stock of, and indebtedness owing shareholders. 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.

35 Miss. Admin. Code Pt. 3, R. 107 Rule 107

Special rules. 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. 108 Special tax (Federal) on S corporations. Mississippi Law does not impose a special tax on capital gains of S corporations, therefore, the Commissioner will not follow the provisions

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of the IRC. Since capital gains are not taxed directly to the S corporation, the amount of such capital gains shall not be used to reduce the amount of income taxable to the shareholder.

35 Miss. Admin. Code Pt. 3, R. 108.01 Rule 108.01

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.

35 Miss. Admin. Code Pt. 3, R. 109 Rule 109

Liability of corporation. 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.

35 Miss. Admin. Code Pt. 3, R. 110 Rule 110

Liability of shareholders. A resident shareholder in a qualified S corporation must report his share of taxable income on his Mississippi Resident Individual Income Tax Return. A nonresident shareholder in such corporation must report on his Mississippi nonresident individual income tax return, income that was derived from sources within Mississippi. If the total taxable income of the corporation is from Mississippi sources, the total pro rata share of income to each nonresident shall be reported in full to Mississippi.

35 Miss. Admin. Code Pt. 3, R. 110.01 Rule 110.01

If the corporation's taxable income is from sources within 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 distributions to nonresidents.

35 Miss. Admin. Code Pt. 3, R. 111 Rule 111

Resident shareholders in nonresident (foreign) S corporation. A resident of Mississippi owning stock in an S corporation doing business and realizing taxable income in a foreign state shall include in Mississippi gross income his pro rata share of taxable income (or loss) of the S corporation but only to the extent that the state in which the taxable income was earned by the corporation has adopted the Federal tax treatment (Subchapter S, IRC) of an S corporation and such corporation has so elected to be treated as an S corporation in such state. A tax credit shall be allowed against the Mississippi tax due on such taxable income reported to another state by the Mississippi resident.

35 Miss. Admin. Code Pt. 3, R. 111.01 Rule 111.01

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.

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35 Miss. Admin. Code Pt. 3, R. 112 Rule 112

Filing requirements. An S corporation chartered under the laws of Mississippi, or an S corporation chartered under the laws of another state or territory and "doing business" in Mississippi and having an election in effect to be treated as an S corporation within the purview of Section 1362 (a), IRC, and as automatically provided in Section 27-7-29 (b), Mississippi Code, and this Regulation, shall, on or before the 15th day of the third month following the close of its taxable year, file an annual combined return of corporation income and franchise tax, on Mississippi Form 62-300. All schedules, where applicable, in Form 62-300 must be completed by the S corporation in the same manner as for any other corporation, with the exception of Schedule B, relating to computation of income tax. If the S corporation is not, as otherwise provided in paragraph (J), liable for Mississippi tax, so indicate on Line 11, Schedule B, that the taxpayer is an S corporation. All S corporations must complete Schedule X and Schedule Y. If any of the shareholders listed in Schedule Y are not legal or actual residents of Mississippi, a nonresident agreement (Form 62-381) for each such nonresident must be attached to and made a part of Form 62-300 as filed by the corporation. Failure on the part of the corporation to secure a complete Form 62-381 from each of its nonresident shareholders renders the corporation liable for Mississippi income tax.

35 Miss. Admin. Code Pt. 3, R. 112.01 Rule 112.01

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.

35 Miss. Admin. Code Pt. 3, R. 112.02 Rule 112.02

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.

35 Miss. Admin. Code Pt. 3, R. 112.03 Rule 112.03

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.

35 Miss. Admin. Code Pt. 3, R. 112.04 Rule 112.04

Once an S corporation begins filing a composite return, it must continue unless permission to change is granted in writing by the Commissioner.

35 Miss. Admin. Code Pt. 3, R. 112.05 Rule 112.05

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

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franchise tax, plus any penalty, interest, or applicable income tax, are due and payable in full by the original due date of the return.

35 Miss. Admin. Code Pt. 3, R. 112.06 Rule 112.06

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.

35 Miss. Admin. Code Pt. 3, R. 113 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 114 (Reserved)

Chapter 04 Charitable Contributions—Corporation

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

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.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

Deductions are allowed for qualifying charitable organizations located in any state.

35 Miss. Admin. Code Pt. 3, R. 102 Rule 102

Mississippi does not allow excess contributions to be carried over and deducted in succeeding years.

35 Miss. Admin. Code Pt. 3, R. 103 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 104 (Reserved)

Chapter 05 Foreign Sales Corporations (FSC's)

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

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.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

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.

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35 Miss. Admin. Code Pt. 3, R. 102 Rule 102

Because of the two preceding paragraphs, dividends paid by the FSC to the parent will not be included in apportionable income of the parent.

35 Miss. Admin. Code Pt. 3, R. 103 Rule 103

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).

35 Miss. Admin. Code Pt. 3, R. 104 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 105 (Reserved)

Chapter 06 Multistate Taxation

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

This regulation is composed of three sections. 1. General topics and definitions. 2. Computation of income. 3. Methods of reporting income.

35 Miss. Admin. Code Pt. 3, R. 101 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 200 General Topics and Definitions

35 Miss. Admin. Code Pt. 3, R. 201 Corporations Required to File

35 Miss. Admin. Code Pt. 3, R. 201.01 Rule 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 27-7-29.

35 Miss. Admin. Code Pt. 3, R. 201.02 Rule 201.02

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.

35 Miss. Admin. Code Pt. 3, R. 201.03 Rule 201.03

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.

35 Miss. Admin. Code Pt. 3, R. 202 Definitions

35 Miss. Admin. Code Pt. 3, R. 202.01 Rule 202.01

Commercial Domicile. "Commercial domicile" means the principal place from which the trade or business of the taxpayer is directed or managed.

35 Miss. Admin. Code Pt. 3, R. 202.02 Rule 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

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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.

35 Miss. Admin. Code Pt. 3, R. 202.03 Rule 202.03

Apportionment. "Apportionment" refers to the division of business income between states by the use of a formula containing apportionment factors.

35 Miss. Admin. Code Pt. 3, R. 202.04 Rule 202.04

Allocation. "Allocation" refers to the assignment of income to a particular state.

35 Miss. Admin. Code Pt. 3, R. 202.05 Rule 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.

35 Miss. Admin. Code Pt. 3, R. 202.06 Rule 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.

35 Miss. Admin. Code Pt. 3, R. 203 Nexus

35 Miss. Admin. Code Pt. 3, R. 203.01 Rule 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: 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.

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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.

35 Miss. Admin. Code Pt. 3, R. 203.02 Rule 203.02

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.

35 Miss. Admin. Code Pt. 3, R. 203.03 Rule 203.03

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.

35 Miss. Admin. Code Pt. 3, R. 203.04 Rule 203.04

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.

35 Miss. Admin. Code Pt. 3, R. 203.05 Rule 203.05

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.

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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. 2. Immune Activities: The following in-state activities will not cause the loss of immunity for otherwise immune sales: a. Advertising campaigns incidental to missionary activities. b. Carrying samples only for display or for distribution without charge or other consideration. c. Owning or furnishing autos to salesmen. d. Passing inquiries and complaints on to home office. e. Incidental and minor advertising, i.e., notice in newspaper that a salesman will be in town at a certain time. f. Missionary sales activities. g. Checking of customers' inventories (for re-order, but not for other purposes). h. Maintaining sample or display room for two weeks (14 days) or less during the tax year. i. Soliciting of sales by an in-state resident employee of the taxpayer; provided the employee maintains no in-state sales office or place of business (in-home or otherwise). 3. Independent Contractors: a. P.L..86-272 provides immunity to certain activities if conducted by an independent contractor that would not be afforded if performed by the taxpayer directly. Independent contractors may engage in the following limited activities in the state without the taxpayer's loss of immunity: i. Soliciting sales. ii. Making sales.

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iii. Maintaining a sales office. b. Sales representatives who represent a single principal are not considered to be independent contractors and are subject to the same limitations as employees. c. Maintenance of a stock of goods in the state by the independent contractor under consignment or any other type of arrangement with the principal shall remove the immunity. 4. Miscellaneous Practices: a. Interstate Commerce: The only activity in the state must be in interstate commerce. If there is any other activity (except that described subsection 203.05 paragraph 2 or otherwise incidental to solicitation), then the immunity shall be lost. Requisites are: i. Approval of the sales must be made outside the state (except for sales by independent contractors). ii. Deliveries must be made from a point outside the state. b. Incorporated: The immunity afforded by P. L. 86-272 does not apply to any corporation incorporated within the taxing state. c. Service vs. Service: Sales of services are not immune under P. L. 86-272. If a sale consists of a mixture of tangible personal property and services, the immunity shall be lost. Examples of such mixture are: i. Photographic development. ii. Fabrication of customer's materials. iii. Installation of equipment. iv. Architectural and engineering services.

35 Miss. Admin. Code Pt. 3, R. 204 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 300 Computation of Income

35 Miss. Admin. Code Pt. 3, R. 301 Rule 301

Business and Nonbusiness Income. Business income means income arising from transactions and activities in the regular course of the taxpayer's trade or business and includes income from real, tangible and intangible property if the acquisition, management, and disposition of the property constitute integral parts of the taxpayer's regular trade or business operations. In essence, all income which arises from the conduct of trade or business operations of a taxpayer's is business income. The income of the taxpayer is business unless clearly classifiable as non-business income.

35 Miss. Admin. Code Pt. 3, R. 301.01 Non-business income means all income other than business income

35 Miss. Admin. Code Pt. 3, R. 301.02 Rule 301.02

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.

35 Miss. Admin. Code Pt. 3, R. 301.03 Rule 301.03

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.

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35 Miss. Admin. Code Pt. 3, R. 301.04 Rule 301.04

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.

35 Miss. Admin. Code Pt. 3, R. 302 Rule 302

Allocation or Apportionment. A taxpayer should use section 400 to determine the method of reporting income to Mississippi for its major line(s) of business. For the following items of income, when they are considered to be general or administrative income by the commissioner, the following rules should be used to determine the way the income is reported. If the income is determined to be business income it should be apportioned; those items determined to be non-business income should be allocated. If the taxpayer is using a formula method of apportionment, then the items below that are classified as business income would be included in apportionable income. If the taxpayer is not required to use a formula method of apportionment or if the taxpayer is using divisional accounting, then the items below that are considered business income shall be apportioned using a sales ratio.

35 Miss. Admin. Code Pt. 3, R. 302.01 Rule 302.01

The following are general rules for determining whether specific income is business or non-business income. 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

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accounts, tax refunds, and municipal obligations. Municipal obligations of the state of Mississippi are exempt. 5. DIVIDENDS. a. Dividends are business income where the stock, with respect to which the dividends are received, arises out of or was acquired in the regular course of the taxpayer's trade or business operations or where the purpose for acquiring and holding the stock is related to or incidental to such trade or business operations. Business income shall not, however, include foreign source dividends realized from stock ownership in a corporation not organized under the laws either of the United States, or any state, district, territory or possession thereof. b. Dividends from domestic, unitary, and controlled subsidiaries are business income. Dividends from foreign, non-unitary, and/or non-controlled corporations are non-business income. Dividends from Domestic International Sales Corporation (DISC's) are business income. For treatment of dividends from a Foreign Sales Corporation (FSC's) see the regulation on FSC's. Dividends from a DISC are business income to the extent actually received, not deemed as is used for federal purposes. Descriptions of domestic, controlled, and unitary corporations are as follows: i. DOMESTIC. Means any corporation organized under the laws of the United States, or any other state, territory or possession thereof. ii. CONTROLLED. In this context, controlled is defined as being: • Where one corporation owns more than 50% of another corporation; or • If ownership by one corporation of another is 50% or less, then the question is whether the first corporation has effective control of the second. If the first corporation does not have effective control of the second, then dividends paid by the second corporation to the first is non-business income. For example, if the first corporation owns 40% of the second corporation, but the remaining 60% is owned by one entity unrelated to the first corporation, then the first corporation does not have effective control. But, if the first corporation owns 40% of the second corporation, and the remaining 60% is owned by the thousands of unrelated shareholders, each with a small percentage, then, in that circumstance, the first corporation would have effective control. If a corporation is controlled or effectively controlled, then the dividends may be business income, depending upon whether this corporation is also domestic and unitary. iii. UNITARY. In general, unitary depends upon the extent that the different entities have been integrated into one economic operation. Some of the items to be considered include autonomy of officers and directors of the different corporations; lines of business; number, size, and type of inter-company transactions, and jointly

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used services such as accounting or tax department. The above list is not all inclusive. It is only for the purpose of illustrating some of the points to be considered in determining whether the entity paying the dividends is unitary with the entity receiving the dividend. 6. PATENT AND COPYRIGHT ROYALTIES. Patent and copyright royalties, including royalties from non-patented items such as "know-how", technical assistance, and use of product name, are business income where the patent or copyright 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 patent or copyright is related to or incidental to such trade or business operations. 7. MISCELLANEOUS INCOME. In general, miscellaneous income, such as scrap sales or collections of bad debts written off, is business income. 8. EXCEPTIONS. Royalty income from mineral production must be allocated to the state where production occurred. Partnership income is allocated directly to the state where the partnership gross income or loss occurred.

35 Miss. Admin. Code Pt. 3, R. 303 Rule 303

Allocation of Non-Business Income. Non-business net rents and royalties from real property are allocated to the state where the property is located.

35 Miss. Admin. Code Pt. 3, R. 303.01 Rule 303.01

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.

35 Miss. Admin. Code Pt. 3, R. 303.02 Rule 303.02

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.

35 Miss. Admin. Code Pt. 3, R. 303.03 Rule 303.03

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.

35 Miss. Admin. Code Pt. 3, R. 303.04 Rule 303.04

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.

35 Miss. Admin. Code Pt. 3, R. 303.05 Rule 303.05

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.

35 Miss. Admin. Code Pt. 3, R. 303.06 Rule 303.06

INTEREST AND DIVIDENDS. Non-business interest and dividends are allocable of the state of commercial domicile.

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35 Miss. Admin. Code Pt. 3, R. 303.07 Rule 303.07

PATENTS AND COPYRIGHTS. 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.

35 Miss. Admin. Code Pt. 3, R. 304 Rule 304

Consistency and Uniformity in Reporting. 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.

35 Miss. Admin. Code Pt. 3, R. 400 Methods of Reporting Income

35 Miss. Admin. Code Pt. 3, R. 401 Basis of Filing

35 Miss. Admin. Code Pt. 3, R. 401.01 Rule 401.01

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.

35 Miss. Admin. Code Pt. 3, R. 401.02 Rule 401.02

DIRECT OR SEPARATE ACCOUNTING. 1. Any taxpayer, taxable both within and without this state, which maintains or could maintain books of account detailing allocation of receipts and expenditures reflecting clearly the business income attributable to property owned or business done in this state, shall determine Mississippi net business income on the basis of direct or separate accounting. 2. Non-allocable general administrative expenses, and non-allocable net business income derived from sales of capital assets, interest, dividends, rents, royalties and other non-allocable business income shall be apportioned to Mississippi on the basis of a sales ratio. 3. In the case, however, of contractors, the non-allocable general and administrative expenses apportioned to this state shall be determined by using the ratio between Mississippi direct job cost and total direct job cost. 4. If at the discretion of the Commissioner a sales ratio does not fairly apportion the above items of income and expense, another ratio, such as an asset ratio, may be required. 5. If a taxpayer feels that a sales ratio does not fairly apportion the above mentioned income or expense among all business activity, then the taxpayer may make application in writing to the Commissioner. This application must explain why the sales ratio does not fairly apportion and specify the ratio that the taxpayer wishes to

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use. The taxpayer shall not use this other ratio unless approved in writing by the Commissioner.

35 Miss. Admin. Code Pt. 3, R. 401.03 Rule 401.03

ALLOCATION OF INCOME. Any taxpayer subject to the taxing jurisdiction of this state shall allocate non-business income or loss within and without this state in accordance with the further provisions of this Regulation. All expenses connected with earning non-business income, such as interest, taxes, general and administrative expenses and such other expenses relating to the production of non-business income, shall be deducted from gross non-business income. Non-business interest expense shall be computed by using the ratio of non-business assets to total assets applied to total interest expense. To the amount of non-business income allocated to this state, there shall be added the amount of net business income assigned, directly allocated or apportioned to this state under the other provisions of this Regulation to establish Mississippi taxable income.

35 Miss. Admin. Code Pt. 3, R. 401.04 Rule 401.04

APPORTIONMENT OF INCOME. If the business activity in respect to any trade or business of a taxpayer occurs both within and without this state, and if by reason of such business activity the taxpayer in another state, portion of the net income (or net loss) arising from such trade or business which is derived from sources within this state shall be determined by apportionment in accordance with the further provisions of this regulation, where direct or separate accounting of net income or loss is not feasible.

35 Miss. Admin. Code Pt. 3, R. 401.05 Rule 401.05

DIVISIONAL ACCOUNTING. If the business activity of a taxpayer is conducted on a divisional basis and a division or divisions of the taxpayer are "doing business" within this state, the Mississippi taxable income of the taxpayer, where separate accounting is or can be maintained on each division, shall, at the election of the Commissioner, be determined on a divisional accounting, nexus is determined on a company-wide basis. Therefore, any division that has activity in Mississippi must compute its Mississippi taxable income using the proper method for that division. (Example: If Mississippi has nexus on a corporation because of one division's activity in the state, and a second division is a manufacturing division with only destination sales into Mississippi, then the second division shall apportion a share of its income or loss to Mississippi, even though, if it were a separate legal entity, it would not be required to do so.) The following shall apply to divisional accounting: 1. If the total net business income of a division or divisions of the taxpayer is derived solely from business activities in Mississippi and such division or divisions, when considered the same as a separate entity, are not taxable in another state, the total net business income derived from a trade or business activity of such division or divisions shall be directly assigned to Mississippi. Business income, on a company-wide basis, derived from sales of capital assets, interest, dividends, rent and royalties shall be apportioned to Mississippi in the ratio that total sales of the included division or divisions bears to total company-wide sales everywhere. Non- business income of the taxpayer shall be allocated to Mississippi in accordance with the further provisions of this Regulation. 2. If the business income of a division or divisions of the taxpayer is derived from business activities both within and without the state and by reason of such business activities such division or divisions, when considered the same as a separate entity,

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are taxable in another state, Mississippi taxable income shall be computed and determined as follows: a. The total net business income derived from a trade or business activity of each division doing business in Mississippi shall be determined on a divisional direct or separate accounting basis. In determining the net business income for each division, a proportionate part of non-allocable general and administrative expenses may be deducted by using the ratio that total sales (gross receipts) of each division bears to total company-wide sales (gross receipts). b. Business income, on a company wide basis, derived from the sale of capital assets, interest, dividends, rents and royalties shall be apportioned to each division in the ratio that total sales (gross receipts) by the division bears to total company wide sales (gross receipts). c. The amounts determined in the above paragraphs, shall be combined of each division. If more than one division is involved, separate combinations are required for each division. d. To the combined amount determined in the previous paragraph, for each division, there shall be applied the apportionment formula specified in this Regulation for the trade or business activity of the division. Separate computations are required for each included division. The amount so apportioned to Mississippi for each division may be combined to determine the total apportioned amount of business income of the taxpayer assignable to Mississippi. e. The non-business income of the taxpayer shall be allocated to Mississippi in accordance with the further provisions of this Regulation. f. The total of the amount apportioned and the total of the amount allocated for all divisions when combined, shall constitute the Mississippi taxable income of the taxpayer.

35 Miss. Admin. Code Pt. 3, R. 401.06 Rule 401.06

CONSOLIDATED OR COMBINED RETURNS. See Regulation on Consolidated and Combined Returns.

35 Miss. Admin. Code Pt. 3, R. 402 Computation of Basis of Filing

35 Miss. Admin. Code Pt. 3, R. 402.01 Rule 402.01

Business Income of Producers of Mineral or Natural Resource Products. 1. Taxpayers engaged in the trade or business of producing oil, gas, other liquid hydrocarbons, sulphur, coal, sand, gravel and other mineral or natural resource products, except timber, shall determine Mississippi net business income from such activity on a direct or separate accounting basis. The Mississippi gross business income from the production of mineral or natural resources shall include: a. Sales of natural or mineral resources produced in Mississippi and sold in this state; b. The market value, at the time of transfer, of all natural or mineral resources produced in this state and transferred by the taxpayer to another state for sale, refining, processing or manufacturing, provided that if the natural or mineral resources are sold by means of an "arms-length"

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transaction prior to refining, processing or manufacturing, the market value prescribed herein shall not exceed the selling price; and; c. The market value, at the time of transfer, of all natural or mineral resources produced by the taxpayer in Mississippi and transferred to a refinery, processing plant, or manufacturing facility of the taxpayer in Mississippi. 2. A natural resource product shall be deemed to be sold in Mississippi if it is located in this state at the time title thereto passes to the purchaser. In the absence of specific proof of value of natural resources at the time of transfer from the state, the value of natural resources at the time of production shall be determined in accordance with the methods prescribed for the determination of "gross income from the property" for purposes of percentage depletion for federal income tax purposes.

35 Miss. Admin. Code Pt. 3, R. 402.02 Rule 402.02

Business Income of Contractors 1. The net business income of taxpayers engaged in the business of contracting shall be accounted for and assigned directly to this state for each contract performed within this state. Taxpayers engaged in the business of contracting both within and without the state shall determine such job cost which cannot be specifically allocated to the Mississippi contract by multiplying such non-allocable business-related expenses in the ratio that Mississippi direct job costs bears to total direct job costs. 2. Where a contract is performed partly within and partly without the state, the net business income assignable directly to Mississippi shall be determined by first deducting from the total contract receipts those job costs directly allocable to said contract and then deducting a pro-rata part of expenses which cannot be directly allocable to any contract, said pro-rata part to be determined by using the ratio between the contract direct job costs and the direct job costs of total contracts. The net business income from the contract, thus determined, shall then be apportioned to Mississippi in the ratio that receipts from said contract allocable to Mississippi for sales tax purposes bears to the total receipts from said contract. In the event that no allocation has been or can be made of the Mississippi gross receipts from said contract for Mississippi sales tax purposes, and the Mississippi gross receipts from said contract cannot otherwise be determined, then the apportionment of the net business income from the contract to Mississippi shall be made by such reasonable method as is acceptable to the Commissioner. 3. In the case of a prime contractor, who enters into a contract with a subcontractor for the performance of all or part of a contract within the State of Mississippi, both prime contractor and subcontractor are required to report any and all income from such contracts. 4. The net business income derived by a contractor from gains or losses from sales of capital assets, interest, dividends, rents and royalties shall be apportioned to Mississippi by multiplying such net business income by a receipts factor, the numerator of which is the total receipts located, assignable, allocated, or otherwise having a situs in this state during the tax year, and the denominator of which is the total receipts of the taxpayer everywhere during the tax year. In the case of sales of capital assets (buildings, land, depreciable machinery and equipment, stocks, bonds,

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etc.) receipts, for purposes of the receipts factor, shall include only the net gain or loss resulting from such sales of capital assets.

35 Miss. Admin. Code Pt. 3, R. 402.03 Rule 402.03

Business Income of Airlines. If an airline has any activity other than simply passing over this state, then it is "doing business" in this state and is required to file a return. The net business income of an airline company which has not been directly assigned, allocated or excluded as otherwise provided by this Regulation shall be apportioned to this state as provided in this section. 1. PASSENGER TRAFFIC INCOME. Business income from passenger traffic shall be apportioned to this state in the ratio that Mississippi revenue passenger miles bears to the total revenue passenger miles. The numerator of the ratio shall be computed by multiplying the number of revenue-producing passengers carried on flights landing or taking off within this state by the number of miles flown over the state by such flights. The denominator shall be determined by multiplying the total number of revenue-producing passengers carried by the total number of miles flown by flights carrying revenue-producing passengers. 2. CARGO TRAFFIC INCOME. Business income from cargo traffic and other classes of traffic shall be apportioned to this state in the ratio that Mississippi revenue ton miles, or other units of cargo transported, multiplied by Mississippi miles flown bears to the total of such elements of the factor. The numerator of each of such ratios shall be computed by multiplying the number of revenue-producing tons, or other units of cargo carried on flights landing or taking off within this state by the number of miles flown over this state by such flights. The denominator of each of such ratios shall be determined by multiplying the total number of revenue-producing tons, or other units of cargo carried, by total number of miles flown by flights carrying such revenue-producing cargo. 3. ALTERNATIVES BASIS. Business income of an airline company, or business income from any class of traffic of an airline company, may, as an alternative to the requirements of the paragraphs above, be apportioned to this state in the ratio that Mississippi flight miles bears to total flight miles during the tax year. The numerator of such alternative ratio shall be computed by multiplying the number of miles flown over this state by such flights. The denominator shall be determined by multiplying the total number of revenue-producing flights by the total number of miles flown by such flights. 4. In all of the apportionment formulas above, mileage from states here the taxpayer is not "doing business" will not be included in the apportionment formula.

35 Miss. Admin. Code Pt. 3, R. 402.04 Rule 402.04

Business Income of Motor Carriers. If a motor carrier picks up, delivers, services equipment, or has any activity other than simply passing through this state, then it is "doing business" in this state and is required to file a return. The net business income of motor carriers which has not been directly assigned, allocated or excluded as provided by this Regulation shall be apportioned to this state as provided in this section. 1. PASSENGER TRANSPORTATION. Business income from the transportation of passengers shall be apportioned to this state in the ratio that Mississippi revenue passenger miles bears to the total revenue passenger miles of the taxpayer during the tax period.

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FREIGHT TRANSPORTATION. Business income from the transportation of freight or cargo shall be apportioned to this state in the ratio that Mississippi revenue ton miles to the total revenue ton miles of the taxpayer during the tax period. 3. PASSENGER-FREIGHT TRANSPORTATION. Business income of taxpayers engaged in the transportation of both passengers and freight shall first make a breakdown of the business income between passenger traffic and freight traffic by using the several ratios between gross revenue from each class of traffic and the total gross operating revenues. Business income from each class or traffic shall then be apportioned to this state in accordance with the two paragraphs above. 4. ALTERNATIVE BASIS. Business income of a motor carrier, or business income from any class of traffic of a motor carrier, may as an alternative to the requirements of the paragraph above, be apportioned to this state (A) in the ratio that Mississippi vehicle miles bears to total vehicle miles of the taxpayer during the tax period, or (B) in the ratio that gross receipts from trips beginning, ending, or passing through Mississippi bears to the total gross receipts. 5. In all of the apportionment formulas above, mileage from states where the taxpayer is not "doing business" will not be included in the apportionment formula.

35 Miss. Admin. Code Pt. 3, R. 402.05 Rule 402.05

Business Income of Certain Utilities. The net business income of taxpayers operating a railroad, express service, telephone or telegraph business, or other form of public service, other than public service companies specifically provided for elsewhere in this Regulation, which has not been directed to this state as provided by this Section. 1. FORMULA. Business income of public utilities shall be apportioned to this state in the ratio that gross operating revenues within Mississippi during the tax year bears to total gross operating revenues everywhere by the taxpayer during the tax year. 2. GROSS OPERATING REVENUE WITHIN MISSISSIPPI. The term "gross operating revenue within Mississippi" means an equal mileage portion of revenue such as ton miles, passenger miles, message miles, and the like as received for interstate business from activity in this state whether such business originates, ends, or passes through Mississippi to this result, there shall be added the Mississippi portions of all intrastate revenue. 3. ALTERNATIVE. In cases where the amounts of gross operating revenues within this state cannot be accurately and adequately determined, the Commissioner may prescribe a method for otherwise apportioning business income in Mississippi. Only methods provided in this regulation may be used without the prior approval of the Commissioner.

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35 Miss. Admin. Code Pt. 3, R. 402.06 Rule 402.06

Business Income of Retailers, Wholesalers, Service Companies and Lessors. The net business income of retailers, wholesalers, lessors and other service companies, merchants, traders, vendors, or dealers buying, selling or renting, other than those specifically provided for elsewhere in this Regulation, which has not been allocated, directly assigned, or excluded as otherwise provided, shall be apportioned to Mississippi by multiplying such net business income by a single sales-factor apportionment formula as defined in subsection 402.09 paragraph 3 of this Regulation.

35 Miss. Admin. Code Pt. 3, R. 402.07 Rule 402.07

Business Income of Pipelines. The net business income of a pipeline company which has not been allocated, directly assigned, or excluded as otherwise provided in this Regulation shall be apportioned to Mississippi by multiplying such net business income by a fraction, the numerator of which is the property factor plus the payroll factor, as defined in subsection 402.09, paragraphs 1 and 2 of this Regulation, plus the traffic miles factor, and the denominator where is three (3). 1. TRAFFIC MILES FACTOR. The term "traffic miles" means the movement or transportation of one barrel of oil, one gallon of gasoline, or one thousand cubic feet of natural or casinghead gas for a distance of one mile. In cases where MCF mileage units cannot be determined, then capacity mileage of the pipeline in Mississippi to total capacity mileage everywhere shall be used. Capacity mileage shall be determined by squaring one-half (½) of the diameter of each size of pipe and multiplying by the mileage of that size of pipe with a total computation for each in Mississippi as compared to the total of such computations everywhere. 2. PIPELINE COMPANY DEFINED. A pipeline company means any taxpayer engaged in the trade or business of moving, conveying or transporting through a system or conduit of pipes any crude oil, natural gas, refined petroleum products, minerals or any other mineral products to a point of delivery either in, out or through Mississippi, and irrespective of whether such products of goods belong to the taxpayer or to others. The term includes transmission lines and connecting field and storage lines.

35 Miss. Admin. Code Pt. 3, R. 402.08 Rule 402.08

Business Income of Manufacturers 1. MANUFACTURERS SELLING PRINCIPALLY AT WHOLESALE. The net business income of a taxpayer, engaged in the trade or business of manufacturing and selling principally at wholesale, which has not been allocated, directly assigned, or excluded as otherwise provided in this Regulation shall be apportioned to Mississippi by multiplying such net business income by a fraction, the numerator of which is the property factor plus the payroll factor plus the sales factor, as defined subsection 402.09, paragraphs 1 and 2, and (c) of this Regulation, and the denominator of which is three (3). 2. MANUFACTURERS SELLING PRINCIPALLY AT RETAIL. The net business income of a taxpayer, engaged in the trade or business of manufacturing and selling principally at retail, which has not been allocated, directly assigned, or excluded as otherwise provided in this Regulation shall be apportioned to Mississippi by multiplying such net business income by a fraction, the numerator of which is the average of the sum of property and payroll factors plus the sales factor, as defined

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in subsection 402.09, paragraphs 1 and 2 of this Regulation, and the denominator of which is two (2).

35 Miss. Admin. Code Pt. 3, R. 402.09 Rule 402.09

Apportionment Factors 1. Property Factor Defined. a. Except as otherwise provided, the property factor of the apportionment formula for each trade or business of the taxpayer shall include all real and tangible personal property owned or rented by the taxpayer and used during the tax period in the regular course of such trade or business. The term "real and tangible personal property" includes land, buildings, machinery, stock of goods, equipment, and other real and tangible personal property, but does not include such properties owned or rented and used for general and administrative functions, transportation equipment (automobiles, trucks, and trailers, aircraft and other mobile equipment), coin or currency, or properties used in the production of non-business or exempt income. The includable property in the property factor shall include the average net book value of property owned, plus the value of rented property computed as provided in the "valuation of rental property" portion of this section of the Regulation. b. PROPERTY USED IN THE PRODUCTION OF BUSINESS INCOME. Property shall be included in the property factor if it is actually used or is available for or capable of being used during the tax period in the regular course of the trade or business of the taxpayer unless expressly excluded. Property held as reserves or standby facilities or property held as a reserve source of materials shall be included in the factor. Property or equipment under construction during the tax period (except inventoriable goods in process) shall be excluded from the factor until such property is actually used in the regular course of the trade or business of the taxpayer. If the property is partially used in the regular course of the trade or business while under construction, the value of the property to the extent used shall be included in the property factor. Property used in the regular course of the trade or business of the taxpayer shall remain in the property factor until its permanent withdrawal is established by an identifiable event such as conversion to the production of non-business income, its sale or its abandonment. c. NUMERATOR. The numerator of the property factor shall include rented by the taxpayer and used in this state during the tax period in the regular course of the trade or business of the taxpayer. Property in transit between locations of the taxpayer to which it belongs shall be considered to be at the destination for purposes of the property factor. Property in transit between a buyer and seller which is included by a taxpayer in the denominator of his property factor in accordance with his regular accounting practices shall be included in the numerator according to the state of destination. The value of transportation equipment such as automobiles, trucks and trailers, aircraft, etc. shall be excluded completely from the property factor.

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d. DENOMINATOR. The denominator of the property factor is the total of such property described in the above three paragraphs wherever located during the tax year. e. VALUATION OF OWNED PROPERTY. i. Property owned by the taxpayer shall be valued at net book value. As a general rule "net book value" is deemed to be the original cost of the property less the depreciation as reflected on the books of the taxpayer and includes the net book value of subsequent capital additions or improvements to the includable property as well as adjustment or partial disposition thereof, by reason of sale, exchange, abandonment, etc. ii. Inventory of stock of goods shall be included in the factor in accordance with the valuation method acceptable for federal income tax purposes and used by the taxpayer for book purposes. iii. Property acquired by gift or inheritance shall be included in the factor as its net book value as reflected on the books of the taxpayer. f. VALUATION OF RENTED PROPERTY. Property rented by the taxpayer is valued at eight times the net annual rental rate. The net annual rental rate for any item of rented property is the annual rental rate paid by the taxpayer for such property, less the aggregate annual subrental rates paid by subtenants of the taxpayer. g. SUBRENTALS. Subrents are not deducted when subrents constitute business income because the property which produces the subrents is used in the regular course of a trade or business of the taxpayer when it is producing such income. h. ANNUAL RENTALS. "Annual rental rate" is the amount paid as rental for property for a 12-month period. Where property is rented for less than a 12-month period, the rent paid for the actual period of rental shall constitute the "annual rental rate" for the tax period. Where a taxpayer has rented property for a term of 12 or more months and the current tax period covers a period of less than twelve months, the rent paid for the short tax period shall be annualized. If the rental term is for less than 12 months, the rent shall not be annualized beyond its term. Rent shall not be annualized because of the uncertain duration when the rental term is on a month to month basis. Annual rent is the actual sum of money or other consideration payable, directly or indirectly, by the taxpayer or for its benefit for the used of the property. Leasehold improvements shall, for the purposes of the property factor, be treated as property owned by the taxpayer regardless of whether the taxpayer is entitled to remove the improvements or the improvements revert to the lessor upon expiration of the lease. Hence, the net book value of leasehold improvements shall be excluded in the factor. i. AVERAGING PROPERTY. As a general rule the average value of property owned by the taxpayer shall be determined by averaging the values at the beginning and ending of the tax period. However, the Commissioner may require or allow averaging by monthly values, or other periodic values, if such method of averaging is required to property reflect the average

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values of the taxpayer's property for the tax period. Averaging by monthly values, or other periodic values, will generally be applied if substantial fluctuations in the values of the property exist during the tax period or where property is acquired after the beginning of the tax period or disposed of before the end of the tax period. Averaging with respect to rented property is achieved automatically by the method of determining the net annual rental rate of such property. 2. Payroll Factor Defined. Except as otherwise provided, the payroll factor of the apportionment formula for each trade or business of the taxpayer shall include the total amount paid by the taxpayer in the regular course of its trade or business for compensation during the tax period. There shall be excluded from the payroll factor amounts paid as compensation for general and administrative functions and amounts paid for the production of non-business or exempt income. a. PAID. The total amount "paid" to employees is determined upon the basis of the taxpayer's accounting method. If the taxpayer has adopted the accrual method of accounting, all compensation properly accrued shall be deemed to have been to have been paid. Notwithstanding the taxpayer's method of accounting, at the election of the taxpayer, compensation paid to employees may be included in the payroll factor by use of the cash method if the taxpayer is required to report such compensation under such method for unemployment compensation purposes. b. COMPENSATION. The term "compensation" means wages, salaries, commissions and other form of remuneration paid to employees for personal services. Amounts considered paid directly include the value of board, rent, housing, lodging, and other benefits, or services furnished to employees by the taxpayer in return for personal services, provided that such amounts constitute income to the recipient under the Federal Internal Revenue Code. Payments made to an independent contractor or any other person for personal services rendered for the taxpayer may, with the approval or requirement of the Commission, be classified as compensation. c. EMPLOYEES. Except as otherwise provided, the term "employee" means any officer of a corporation, or any individual who, under the usual common-law rules applicable in determining the employer-employee relationship, has the status of an employee. Generally, a person will be considered to be an employee if he is included by the taxpayer as an employee for purposes of the payroll taxes imposed by the Federal Insurance Contributions Act. d. NUMERATOR. The numerator of the payroll factor is the total amount paid in this state during the tax period by the taxpayer for compensation. e. DENOMINATOR. The denominator of the payroll factor is the total compensation paid everywhere during the tax period. f. Compensation paid in this state. Compensation is paid in this state if any one of the following tests, applied consecutively, are met: i. The employee's service is performed entirely within this state. ii. The employee's service is performed both within and without the state, but the service performed without the state is incidental to the

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employee' s service within the state. The word "incidental" means any service which is temporary or transitory in nature, or which is rendered in connection with an isolated transaction. g. If the employee's services are performed both within and without this state, the employee's compensation will be attributed to this state: i. If the employee's base of operations is in the state; or ii. If there is no base of operations in any instance in which some part of the service is performed, but the place from which the service is directed or controlled is in this state; or iii. If the base of operations or the place from which the service is directed or controlled is not in any state in which some part of the service is performed but the employee's residence is in this state. h. The term "base of operations" is the place of more or less permanent nature from which the employee starts his work and to which customarily returns in order to receive instructions from the taxpayer or communications from his customers or other persons or to replenish stock or other materials, repair equipment, or perform any other functions necessary to the exercise of this trade or profession at some other point or points. The term "place from which the service is directed or controlled" refers to the place from which the power to direct or control is exercised by the taxpayer. 3. Sales Factor Defined. a. For the purpose of the sales factor of the apportionment formula for each trade or business of the taxpayer, the term "sales" means all gross receipts derived by the taxpayer from transactions and activity in the regular course of such trade or business during the tax period which have not been directly assigned, allocated or excluded as provided in this Regulation. The following are rules for determining "sales" in various situations: i. In the case of a taxpayer engaged in manufacturing and selling or purchasing and reselling goods or products, "sales" includes all gross receipts from the sales of such goods or products held by the taxpayer primarily for sale to customers in the ordinary course of its trade or business. Gross receipts for this purpose means gross sales, less returns and allowances, and includes interest income, service charges, carrying charges, or time-priced differential charges incidental to such sales. Federal and state excise taxes (including sales taxes) shall be included as part of such receipts if such taxes are passed on to the buyer or included as part of the selling price of the product. ii. In the case of cost plus fixed fee sales or service contracts, "sales" include the entire reimbursed cost, plus the fee. iii. In the case of a taxpayer engaged in providing services, "sales" includes the gross receipts from the performances of such services including fees, commissions, and similar items. iv. In the case of a taxpayer engaged in renting real and tangible property "sales" includes the gross receipts from the rental, lease, or licensing the use of the property.

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v. In the case of a taxpayer engaged in the sale, assignment, or licensing of intangible personal property such as patents and copyrights, "sales" include the gross receipts therefrom. vi. In the case of business income derived from interest and dividends, such receipts constitute "sales". vii. In the case of business income derived from the sale of capital assets (sale of equipment used in business, sales of stocks, bonds, etc.), such receipts constitute "sales" but only to the extent of the gain realized from such sales. b. SALES OF TANGIBLE PERSONAL PROPERTY ARE IN THIS STATE. Gross receipts from sales of tangible personal property (except sale to the United States Government) are in this state: i. If the property is delivered or shipped to a purchase, within this state regardless of the f. o. b. point or other conditions of sale, or ii. If the property is shipped from an office, store, warehouse, factory, or other place of storage in this state and the taxpayer is not taxable in the state of the purchaser. iii. Property shall be deemed to be delivered or shipped to a purchaser within this state if the recipient is located in this state, even though the property is ordered from outside this state. iv. Property is delivered or shipped to a purchaser within the state if the shipment terminates in this state, even though the property is subsequently transferred by the purchaser to another state. v. The term "purchaser within this state" shall include the ultimate recipient of the property if the taxpayer in this state, at the designation of purchases, delivers to or has the property shipped to the ultimate recipient within this state. vi. When the property being shipped by a seller from the state of origin to a consignee in another state is diverted while en route to a purchaser in this state, the sales are in this state. vii. If the taxpayer is not taxable in the state of the purchaser, the sale is attributed to this state if the property is shipped from an office, store, warehouse, factory, or other place of storage in this state. viii. If a taxpayer, whose salesman operates from an office located in this state, makes a sale to a purchaser in another state in which the taxpayer is not taxable, and the property shipped directly by a third party to the purchaser, the following rules apply: • If the taxpayer is taxable in the state from which the third party ships the property, then the sale is in such state. • If the taxpayer is not taxable in the state from which the property is shipped, then the sale is in this state. c. SALES OF TANGIBLE PERSONAL PROPERTY TO THE UNITED STATES GOVERNMENT ARE IN THIS STATE. Gross receipts from the sales of tangible personal property to the United States Government are in this state if the property is shipped from an office, store, warehouse, factory, or other place of storage in this state. For purposes of this Regulation, only

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sales for which the United States Government makes direct payment to the seller pursuant to the terms of a contract constitute sales to the United States Government. Thus, as a general rule, sales by a subcontractor to the prime contractor (the prime contractor being party to the contract with the United States Government) do not constitute sales to the United States Government. d. SALES OTHER THAN SALES OF TANGIBLE PERSONAL PROPERTY ARE IN THIS STATE. SECTION 27-7-23(c)(3) provides for the inclusion in the numerator of the sales factor, gross receipts from transactions other than sales of tangible personal property (including transactions with the United States Government). Under this section gross receipts are attributed to this state if the income-producing activity is performed wholly within this state. Gross receipts, with respect to a particular item of income, derived from income-producing activity performed within and without this state shall be attributed to this state to the extent of such gross receipts which represent services or activities actually performed within this state. e. INCOME-PRODUCING ACTIVITY DEFINED. The term "income-producing activity" applies to each separate item of income and means the transactions and activity directly engaged in by the taxpayer in the regular course of its trade or business for the ultimate purpose of obtaining gains or profits. Accordingly, the income-producing activity includes but is not limited to the following: i. The rendering of personal services by employees or the utilization of tangible and intangible property by the taxpayer in performing a service. ii. The performance, execution or subletting of a construction contract by the taxpayer to whom a construction contract has been awarded. iii. The sale, rental, leasing, or licensing or other use of real property. iv. The rental, leasing, licensing or other use of tangible personal property. v. The sale, licensing or otherwise of intangible personal property. f. SPECIFIC APPLICATIONS. The following are special rules for determining when receipts from income-producing activities described below are in this state: i. Gross receipts from the sale, lease, rental or licensing of real property are in this state if the real property is located in this state. ii. Gross receipts from the rental, lease or licensing of tangible personal property are in this state if the property is located in this state. The rental, lease, licensing or other use of tangible personal property in this state is a separate income-producing activity from the rental, lease, licensing or other use of the same property while located in another state; consequently, if property is within and without this state during the rental, lease or licensing period, gross receipts attributable to this state shall be measured by a ratio of the time the

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property was physically present or was used in this state bears to the total time or use of the property everywhere during such period. iii. Gross receipts for the performance of personal services are attributable to this state to the extent such services are performed in this state. Usually where services are performed partly within and partly without this state, the services performed in each state will constitute a separate income-producing activity; in such case the gross receipts for the performance of services attributable to this state shall be measured by a ratio of the time spent in performing such services in this state bears to the total time spent in performing services everywhere. Time spent in performing services includes the amount of time expended in the performance of a contract or other obligation which produced such gross receipts. Personal service not directly connected with the performance of the contract or other obligation, as for example, time expended in negotiating the contract, is excluded from the computation. iv. In the case of a construction contract performed partly within and partly without this state, gross receipts attributable to this state shall be the amount of the construction contract allocable to Mississippi for Mississippi sales tax purposes. g. NUMERATOR. The numerator of the sales factor shall include the gross receipts attributable to this state and derived by the taxpayer from transactions and activity in the regular course of its trade or business. All interest income, service charges, carrying charges, or time-price differential charges incidental to such gross receipts shall be included regardless of the place where the accounting records are maintained or the location of the contract or other evidence of indebtedness. h. DENOMINATOR. The denominator of the sales factor shall include the total gross receipts derived by the taxpayer from transactions and activity in the regular course of its trade or business, except receipts directly assigned, allocated or excluded by the provision of this Regulation. i. UNIFORMITY. It is the purpose and intent of this Regulation to include in both the numerator and denominator of the factors described in the above sections only those properties, payrolls and sales which are comparable.

35 Miss. Admin. Code Pt. 3, R. 402.10 Rule 402.10

Other Provisions. If the allocation and apportionment provisions of this Regulation do not fairly represent the extent of the taxpayer's business activity in this state, the taxpayer may petition for, or the Commissioner may require, in respect to all or any part of the taxpayer's business activity, if reasonable: 1 Separate accounting; 2. The exclusion of any one of the factors; 3. The inclusion of one or more additional factors which will fairly represent the taxpayer's business activity in this state; or 4. The employment of any other method to effectuate an equitable allocation and apportionment of the taxpayer's income.

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35 Miss. Admin. Code Pt. 3, R. 403 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 500 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 600 (Reserved)

Chapter 07 Consolidated or Combined Returns

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

Taxpayer Election to File Consolidated or Combined Returns 1. Two or more members of an affiliated group of corporations may elect to file a consolidated income tax return when all the business activities of the group of affiliated corporations included in the consolidated return are conducted in, and are taxable solely in, Mississippi. In determining whether the business activities of the group are conducted in and are taxable in more than one state, the test of "taxable in another state" as provided and defined in the Multistate Regulation, will apply. 2. Two or more members of an affiliated group of corporations taxable in Mississippi and where one or more are taxable in another state, as provided in the Multistate Regulation, may elect to file a combined income tax return, as follows: a. Net income (or loss) of each member of the affiliated group included in the combined return shall be computed on an individual corporate member basis. b. Mississippi taxable income for each member included in the combined return shall be determined in accordance with the provisions of the Multistate Regulation. The formula prescribed in, or the direct accounting procedures prescribed in such regulation, shall be applied to each member on an individual corporate basis to determine net business income apportioned or directly assigned to Mississippi. To that amount shall be added non-business income allocated or apportioned to Mississippi by each member. The results from each member's computation shall then be combined to determine the taxable income of the affiliated group.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

Commissioner's Authority to Require Filing of Combined or Consolidated Return. 1. The Commissioner may require any or all members of a group of affiliated corporations, whether or not subject to the tax jurisdiction of this state, to file a combined or consolidated Mississippi income tax return if he believes such combined or consolidated return is necessary to clearly and equitably reflect the Mississippi taxable income of the affiliated group, or included member or members thereof, subject to the following conditions: a. The net business income (or loss) of each member required to be included in the combined income tax return shall be determined on an individual corporate member 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. The combined net business income (or loss) shall then be apportioned by use of formulas prescribed and set forth in the Multistate Regulation to determine the amount of net

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business income apportioned to Mississippi. The apportionment formula provided in the Multistate Regulation shall then be the consolidated elements or components of the required factors for the affiliated group. b. To the amount determined in (a) above shall be added the combined net profit (or loss) from non-business income of the affiliated group allocated or apportioned to Mississippi to determine the total Mississippi taxable income. 2. However, if the combined income under paragraph one (1) of this section does not clearly reflect Mississippi income then the Commissioner may require consolidated returns of any of the corporations that are members of the affiliated group that would be necessary to clearly and equitably reflect the Mississippi income of the affiliated group.

35 Miss. Admin. Code Pt. 3, R. 102 Rule 102

In General. 1. 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 directly owned by one or more of the other member corporations; and the common parent corporation directly owns 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 Regulation, the term "stock" does not include nonvoting stock which is limited and preferred as to dividends. 2. When an affiliated group of corporations is eligible to and elects, or is required to file returns on a combined or consolidated 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. If a consolidated or combined return is filed, all members of the affiliated group who are "doing business" in Mississippi must be included in the return. If the affiliated group filed separate returns, they cannot amend their returns and file a consolidated or combined return unless such return was filed in the previous year. An election will be considered exercised by the filing of an annual income tax return reflecting consolidated reporting therein. 3. The consolidated or combined return of eligible and included members of an affiliated group relates only to its consolidated or combined income tax liability. Liability for applicable franchise taxes, annual reports of corporations, withholding taxes and other payroll, privilege and other excise taxes may not be computed on a consolidated or combined return basis. A separate report, return or schedule, as otherwise required by Mississippi Law, shall be filed by each applicable individual member of the affiliated group. In the case of franchise taxes and the annual reports of corporations, a separate schedule is required for each member of the affiliated group subject to the measure of the franchise tax and subject to the requirement of filing an annual report of corporations.

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An includable corporation for the purpose of filing a consolidated or combined income tax return, within the limitations imposed by Mississippi Law, is any eligible corporation except corporations exempt under Section 27-7-29(a), Mississippi Code of 1972. Mississippi has not adopted Federal tax treatment of a Domestic International Sales Corporation (DISC) and a DISC is treated under Mississippi Law as an ordinary corporate entity; therefore, a DISC is an eligible corporation for consolidated or combined return purposes where such entity is a member of an affiliated group of corporations. S Corporations having an election in effect under Section 27-7-29(b) which choose to have their corporate income taxed directly to shareholders lose their status of S Corporations if they become members of an affiliated group electing to file a consolidated or combined return. 5. Each member of the affiliated group is severally liable for the tax on a consolidated or combined return and for any subsequently determined deficiency thereon. No intercompany agreement can change this rule. 6. There shall be attached to the consolidated return supporting schedules in columnar form to show separately and in combination, the profit and loss statement, balance sheet, analysis of unappropriated retained earnings and reconciliation of book income to income per return of each affiliated corporate member included in the elected combination. 7. The consolidated or combined return of an affiliated group must be filed on the basis of the common parent's taxable year and each subsidiary must adopt the common parent's annual accounting period for the first consolidated or combined return year for which the subsidiary's income is includable in the consolidated or combined return.

35 Miss. Admin. Code Pt. 3, R. 102.01 Rule 102.01

If no parent-subsidiary relationship exists, the consolidated or combined return will be determined using the income year of the affiliated corporation member expecting to have, on a recurring basis, the largest amount of Mississippi net taxable income.

35 Miss. Admin. Code Pt. 3, R. 102.02 Rule 102.02

Generally, a newly organized affiliated corporate member will be, if eligible, included within the group filing the consolidated return in the year organized.

35 Miss. Admin. Code Pt. 3, R. 102.03 Rule 102.03

A newly acquired corporate member will also be eligible to be included in the combined return; but loss carryovers incurred prior to the time that the corporation became a member of the affiliated group can only offset income in that newly acquired corporation's future returns. Those losses will not be allowed to offset income of the other affiliated corporations.

35 Miss. Admin. Code Pt. 3, R. 103 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 104 (Reserved)

Chapter 08 Interest Expense

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

Section 27-7-9(j)(6) requires that if a corporation or other legal entity enters into any transaction that is for the benefit of its shareholders or for the benefit of an affiliated

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corporation without an equal mutual business benefit to the corporation, the transaction will be adjusted or eliminated. Interest expense incurred for the purchase of its own stock, whether the corporation retires this stock or not, or for leveraged buyouts are not for the benefit of the corporation and may not be taken as an expense of the corporation.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

Section 27-7-17 provides that an interest expense deduction will be denied or limited in the case of a parent that makes a loan to a subsidiary which is not business related. Subsidiaries that are undercapitalized and borrow money from a parent corporation or other corporation of an affiliated group may not deduct any interest on these loans. Corporations that borrow funds from affiliated corporations for working capital and have been paying dividends instead of retaining an amount of funds sufficient to maintain operations will be allowed to deduct interest only on an amount equivalent to the borrowed funds less dividends paid. Amounts of interest on borrowed funds used to pay dividends will not be allowed as a deductible expense of the corporation.

35 Miss. Admin. Code Pt. 3, R. 102 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 103 (Reserved)

Subpart 09 Partnerships

Chapter 01 Partnerships

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

Definition For purposes of this regulation, the term "partnership" includes a syndicate, group, pool, joint venture or other unincorporated organization through or by means of which any business, financial operation or venture is carried on, and which is not within the meaning of this title, a corporation or a trust or estate.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

Return 1. 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 return shall include the names, addresses and social security numbers or identification numbers of all partners who are entitled to share in the partnership net income. The return shall be signed by any one of the partners and shall be filed on prescribed forms with the Commissioner on or before the due date as provided by statute. 2. The individual partners are subject to tax upon their distributive share of the partnership net income, whether distributed to them or not. The partnership net income shall be computed in the same manner and on the same basis as the net income of an individual, except that the deduction for contributions or gifts is not allowed. These deductions are allowed to the partners in their individual return. 3. Where the result of partnership operation is a net loss, the loss will be divisible by the partners in the same proportion as net income would have been divided (unless the partnership agreement provides otherwise) and may be taken by the partners in their return. The amount of partnership loss that may be allowed to a partner is

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limited to the amount of the adjusted basis of this interest in the partnership at the end of the partnership taxable year in which the loss occurred. 4. Payments made to a partner for services rendered and for interest on capital contributions are not deductible in computing the net income of the partnership, such payments being held to represent a division of partner profits.

35 Miss. Admin. Code Pt. 3, R. 102 Rule 102

Nonresident Partner A nonresident individual, who is a member of a partnership owning property or doing business in the State of Mississippi, is subject to tax on his share of the partnership net income, whether distributed or not. If the partnership does business both within and without the state, it will be necessary to compute the income (or loss) of the partnership from sources within the state separately from the other income in order to determine the amount of income taxable to (or the amount of the loss deductible by) the nonresident partners. The nonresident partner is subject to tax only on such share of his income, whether or not distributed, as is assignable to Mississippi.

35 Miss. Admin. Code Pt. 3, R. 103 Rule 103

Liability of Partnership 1. The partnership and general partners shall be jointly and severally liable for any tax not paid by the partners. Each partner in a partnership, whether general or limited, resident or nonresident, is responsible for paying tax on his share of the net gain or profit from the partnership. If the collection of such tax might not be otherwise reported by the partners, the Commissioner shall require the partnership or the general partners to remit the tax. 2. However, the partnership may withhold five percent (5%) of the net gain or profit of the partnership and remit to the Commissioner. The remittance shall be deemed estimated payments of the partners and shall be allocated pro rata to the partners estimated tax account and would be available for refund to the partner if his individual return indicates his tax liability to be less than the five percent (5%) withheld. 3. A partnership that elects to withhold the five percent (5%) should file the prescribed form with the Commissioner and remit the tax. This form shall be filed by the due date of the partnership return and a copy shall be provided to the partners after the form is submitted to the Commissioner. 4. A partnership that has income from sources within and without Mississippi should withhold from Mississippi source income only.

35 Miss. Admin. Code Pt. 3, R. 104 Rule 104

Composite Returns 1. A partnership is allowed to file a composite return on behalf of its partners in very limited circumstances. A composite return is a return in which a partnership pays the income tax due for some, or all, of its partners. The only partners who are eligible to be included in the composite return are nonresident partners without any activity in Mississippi other than that from the partnership. 2. Resident partners and nonresident partners with other activity in Mississippi cannot be included in a composite return. Each of these partners must file his own return. 3. If a composite return is filed, the partnership return is completed like any other partnership return, but an additional schedule is attached listing the partners, the

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partner's identification or social security number, and the partner's distribution that is to be included in the composite return. The partnership then files a nonresident individual return under the partnership name and identification number in which it includes the composite income. 4. The partnership is allowed to deduct 10% of adjusted gross income not to exceed $5,000 per composite return on the income that relates to individuals as the amount for personal exemptions or standard deductions. 5. Once a partnership begins filing a composite return, it must continue unless permission to change is granted in writing by the Commissioner.

35 Miss. Admin. Code Pt. 3, R. 105 Rule 105

Tax Years If the taxable year of a partner is different from that of the partnership, the share of the partnership income to be reported by that partner is based upon the income of the partnership for any taxable year of the partnership ending with or within the partner's taxable year.

35 Miss. Admin. Code Pt. 3, R. 106 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 107 (Reserved)

Subpart 10 Other Entities and Miscellaneous

Chapter 01 Fiduciaries

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

Fiduciary means a guardian, trustee, executor, administrator, receiver, conservator or any person, whether individual or corporate, acting not for his own benefit, but for the benefit of another, as to whom he stands in a relation necessitating great confidence and trust, and a high degree of good faith, or acting in any fiduciary capacity for any person, trust or estate.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

Returns by Fiduciaries. All legal fiduciaries must file a fiduciary return unless the gross income does not exceed the allowable exemption, or unless there is a specific exception in the regulations. A fiduciary who is the guardian of a minor or incompetent, and where no legal trust or estate has been established, is an exception and is not required to file a return.

35 Miss. Admin. Code Pt. 3, R. 102 Rule 102

Returns by Fiduciaries as Agent. Every fiduciary, or at least one of joint fiduciaries (except receivers appointed by authority of law, in possession of part only of the property of the taxpayer) is required to make a return, or returns, of income for the individual (decedent, minor or incompetent) whose entire income from whatever source derived is in his charge, if the gross income of such individual exceeds the exemption plus the standard deduction to which such individual may be entitled.

35 Miss. Admin. Code Pt. 3, R. 103 Rule 103

Fiduciary Distinguished from Agent. There may be a fiduciary relationship between an agent and a principal, but the word "agent" does not denote a fiduciary. A fiduciary relationship cannot be created by a power of attorney. An agent having entire charge of property, with authority to effect and execute leases with tenants entirely on his own

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responsibility and without consulting his principal, merely turning over the net profits from the property periodically to his principal by virtue of authority conferred upon him by a power of attorney, is not a fiduciary within the meaning of the statute. In cases where no legal trust has been created in the estate controlled by the agent and attorney, the liability to make a return rests with the principal.

35 Miss. Admin. Code Pt. 3, R. 104 Rule 104

Minors. A minor is taxable on his wages, on the income he receives from the property he owns, and on income from funds held in trust for him. If the gross income of a minor is in excess of the exemption provided for under the Income Tax Act of 1952, he must file a return. On his return, the minor is entitled to his own deductions and exemptions, like any other taxpayer. All expenditures by the parent of the child attributable to amounts which are includable in the gross income of the child (and not of the parents) shall be treated as paid or incurred by the child. If a minor's income tax is not paid, an assessment made against the minor will be treated as if it were made directly against the minor's parent or guardian.

35 Miss. Admin. Code Pt. 3, R. 105 Rule 105

Guardians. A guardian, whether of an infant or other person, is a fiduciary, and as such is required to make and file the return for his ward and pay the tax. Such a fiduciary is subject to all the provisions of this law which apply to individuals, including the allowance of personal exemptions and credits.

35 Miss. Admin. Code Pt. 3, R. 106 Rule 106

Decedents. The net income of deceased individuals who, at the time of death, were residents and who died during the taxable year or subsequent thereto without having made a return shall be taxed at the rates and in the same manner as living persons. A return for any year or period for which no return has been filed by the decedent prior to his death shall be made and filed by the executor or administrator of the estate of such decedent or the person or persons having charge of the properties of such decedent.

35 Miss. Admin. Code Pt. 3, R. 107 Rule 107

Devises, for income tax purposes, must report the income derived from the realty devised to them for all taxable periods subsequent to the testator's death, except in cases where a trustee or conservator is duly appointed to take possession of the realty pending the outcome of a judicial proceeding or action. In such case, the income from the realty would be properly taxable, pending the contest, to the fiduciary as the income of property held in trust under the provisions of the act.

35 Miss. Admin. Code Pt. 3, R. 108 Rule 108

A bequest is a gift by will of personal property. A devise is a gift of real property by the last will and testament of the donor. A bequest or devise received by a legatee under the provisions of a will or by an heir in accordance with the statutes of descent and distribution is tax exempt, but not the income thereof.

35 Miss. Admin. Code Pt. 3, R. 109 Rule 109

The income tax imposed upon individuals shall be applicable to the income of estates or of any kind of property held in trust as well as the net income received during the taxable year by deceased individuals who, at the time of death, were residents and who have died during the taxable year or subsequent thereto without having made a return, and the net income of resident insolvent or incompetent individuals where the fiduciary has complete charge of such net income. The rate of tax, the statutory provisions respecting gross income, and,

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with certain exceptions, the deductions, exemptions and credits allowed to individuals apply also to estates and trusts.

35 Miss. Admin. Code Pt. 3, R. 110 Rule 110

The provisions of this regulation relating to estates and trusts, fiduciaries and beneficiaries contemplate that the corpus of a trust, or the income therefrom is, within the meaning of the act, no longer to be regarded as that of the grantor. If, by virtue of the nature and purpose of the trust, the corpus or income therefrom remains attributable to the grantor, these provisions do not apply.

35 Miss. Admin. Code Pt. 3, R. 111 Rule 111

In general, the income of an estate or trust for the taxable year which is currently distributed to the respective beneficiaries must be returned by and will be taxed to the beneficiaries, but the income of a trust which is to be accumulated or held for future distribution, whether consisting of ordinary income or gain from the sale of assets included in the corpus of the trusts, must be returned by and will be taxed to the fiduciary. However, regardless of whether or not the income is taxable to the fiduciary or to the distributee, the fiduciary is responsible for reporting all income, allocation of the tax being affected by permitting the fiduciary, under certain circumstances, to show as a deduction the amounts credited or paid to the distributee.

35 Miss. Admin. Code Pt. 3, R. 112 Rule 112

Income to Fiduciary. Generally, the gross income of an estate or trust is determined in the same manner as that of an individual. Gross income of an estate or trust includes all items of gross income received during the taxable year, including: 1. Income accumulated in trust for the benefit of unborn or unascertained person or persons with contingent interest, and income accumulated or held for future distribution under the terms of the will or trust. This income is taxed to the fiduciary. 2. Income which is distributed currently by the fiduciary to the beneficiaries, and income collected by the guardian of an infant which is to be distributed as the court may direct. This income is usually deductible by the fiduciary and is taxed to the beneficiary. (See deductions for fiduciaries.) 3. Income received by the estate of a deceased person during the period of administration or settlement of the estate. This income may be taxed to the fiduciary or to the beneficiary, depending upon the amounts which are properly paid or credited to the beneficiary. (See deductions for fiduciaries.) 4. Income which, in the discretion of the fiduciary, may be either distributed to the beneficiaries or accumulated. This income may be taxed to the fiduciary or to the beneficiary, depending upon the amounts which are properly paid or credited to the beneficiary. (See deductions for fiduciaries.)

35 Miss. Admin. Code Pt. 3, R. 113 Rule 113

Exemptions of Fiduciaries. The personal exemptions allowed to fiduciaries are as follows: 1. Estates. In the case of an estate, a specific exemption of six hundred dollars ($600.00). 2. Trusts. In the case of a trust which, under its governing instrument, is required to distribute all of its income currently, a specific exemption of three hundred dollars ($300.00). In the case of all other trusts, a specific exemption of one hundred dollars ($100.00).

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35 Miss. Admin. Code Pt. 3, R. 114 Rule 114

Deductions for Fiduciaries. A standard deduction of $1700 is allowed to fiduciaries in lieu of itemized fiduciary expense. In addition to the deductions authorized for individuals, the following will be allowed: 1. Income which is currently paid or credited to a beneficiary by a fiduciary is deductible on the fiduciary's return. This deduction will be disallowed if the beneficiary does not report this income, if so required. 2 a. Reasonable amounts paid or incurred by a fiduciary on account of administration, including fiduciaries' fees and expenses of litigation, are deductible, even though the estate or trust might not be engaged in a trade or business, unless the expenses were for the production or collection of tax-exempt income or were claimed as a deductible administration expense or loss on an estate tax return for Mississippi estate tax purposes. b. Amounts deductible as administration expenses or losses for estate tax purposes are not deductible by the estate for income tax purposes unless the estate files a statement (in duplicate) to the effect that the items have not been allowed as deductions for estate tax purposes and that all rights to deduct them for such purposes are waived. 3. Estate Tax Deduction. An estate may be entitled to claim the estate tax deduction if the estate must include in gross income for any tax year an amount of income in respect to a decedent. The estate tax deduction is computed based on the Mississippi estate tax attributable to the net value of all the items included in the estate that represent income in respect of the decedent, less adjustment for distribution of this income to beneficiaries.

35 Miss. Admin. Code Pt. 3, R. 115 Rule 115

Income Taxable to Beneficiaries. Any amount described in this regulation as being deductible from the gross income of the estate or trust shall be included in computing the net income of the legatees, heirs or beneficiaries, except in the case of income distributed to nonresidents of this state from investments in intangibles (dividends, interest etc.) having a situs in Mississippi in which case such amounts may be excluded. Income from other sources distributed to nonresidents shall be included in gross income and reflected in the return filed by such nonresident with this state.

35 Miss. Admin. Code Pt. 3, R. 116 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 117 (Reserved)

Chapter 02 Decedent's and Successor's Income

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

The final return of a taxpayer shall be computed on the same method of accounting (cash or accrual) used by the decedent in the last income tax return filed by him with the State of Mississippi within the three years immediately preceding the date of his death. 1. Inclusions in Gross Income of Decedent. The amount of all items of gross income of a decedent which are not properly includible in the taxable period in which his death occurred or a prior period, shall be included in gross income for the taxable year received by:

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a. The estate of the decedent, if the right to receive the amount is acquired by the decedent's estate from the decedent; b. The person who, by reason of the death of the decedent, acquires the right to receive the amount, if the right to receive the amount is not acquired by the decedent's estate from the decedent; or, c. The person who acquires from the decedent the right to receive the amount by bequest, devises or inheritance, if the amount is received after a distribution by the decedent's estate of such right. 2. Installment Obligations. If the decedent at the time of his death possessed installment obligations which were being reported on the installment basis, the unreported income on such obligations may be reported by the decedent's estate on the same basis used by the decedent prior to his death or they may be reported and included in the decedent's final return. 3. Three Years Failure to File. If a deceased taxpayer has not filed a return with the State of Mississippi within the three years immediately preceding the date of death, the Commissioner may require that the return be filed on the cash basis. 4. Nonresident Successor. If any successor of a decedent is not a resident of this state, he is considered for the purposes of this section a nonresident with income subject to tax in this state.

35 Miss. Admin. Code Pt. 3, R. 101 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 102 (Reserved)

Chapter 03 Insurance Companies

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

GROSS INCOME: 1. Gross receipts or gross income of all insurance companies, including mutuals, reciprocals, and all types of insurance companies or associations, of whatever nature or by whatever term designated, shall include premiums, reinsurance premiums, considerations for annuities and supplementary contracts, interest including interest income on mortgage loans secured by real estate located in Mississippi, rent, dividends, and all other income, regardless of character or designation, unless otherwise exempted or provided for, under the provisions of the act. Gross income shall be computed on an accrual basis unless, because of taxpayer's accounting system, a more accurate computation can be made on a receipts basis. 2. If reserve funds maintained for the purpose of liquidating policies and contracts at maturity or on surrender are transferred to surplus, the portion, so transferred that has been taken as a deduction from Mississippi gross income in the current year or prior years shall be included in Mississippi gross income for the year in which such transfer is made. 3. Code Section 27-7-15(4)(g), provides for the exclusion of gross income received by domestic corporations taxable in another state, and derived from business activity conducted outside this state. The Commissioner has construed the provision as permitting a domestic company to exclude only direct premiums and insurance

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considerations derived from other taxable states and jurisdictions when such income is earned through the operation of a bona fide office, agency or place of business without the State of Mississippi. When a company excludes income, it must exclude all expenses incurred in earning that income, including retaliatory premium taxes. All reinsurance assumed premiums of a domestic company and all other income must be included in Mississippi income, unless earned from sources without the state as defined in the statute. 4. Mississippi gross income from foreign insurance companies shall include all direct premiums and considerations derived from within this state as shown by the company's annual statement, and all reinsurance assumed premiums received from Mississippi companies. There also shall be included the income from intangible property including interest income on mortgage loans secured by real estate located in Mississippi, if the evidence of ownership has acquired a business, commercial or actual situs in this state; rentals or royalties from property or any interest in property within the state, and income from the operation, ownership or sale of any property within this state. 5. Life insurance companies must report their income under the direct accounting method. Other insurance companies in lieu of the direct accounting method may determine their Mississippi net income from underwriting by apportioning to this state a part of their total net underwriting income. Companies electing to use the apportionment method should compute their Mississippi net income in the following manner: a. From a company-wide net underwriting gain, as shown by the company's annual statement, deduct policy dividends, which qualify as a deduction. b. Apply to the remainder so computed, the ratio between Mississippi net premiums written and company-wide net premiums written. c. To the Mississippi net income thus apportioned add the net income from intangible property if the evidence of ownership has acquired a business, commercial or actual situs in this state; the net rental and royalty income from property or any interest in property within this state; and net income from the operation, ownership or sale of any property within this state. d. Deduct from the total so computed any net losses from the rental, lease, operation, ownership or sale of any property within this state. e. Add or deduct other income or other losses, which are not specific to any state, in the ratio of Mississippi net premiums written to company- wide net premiums written. 6. Once the apportionment method of reporting is elected, it must follow for subsequent years unless permission is granted by the Commissioner to change to the direct accounting method. One of a group of affiliated companies may use the apportioned method of reporting only if all the non-life companies of the same group use said method.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

DEDUCTIONS: 1. Insurance companies may deduct from gross income the deductions provided by statute on the same basis and the same measure as other corporations. Deductions

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shall be computed on an incurred basis except that, where taxpayer reports income on a receipts basis, deductions must be computed on a paid basis. 2. Amounts representing rebates, return premiums and premiums on policies not taken may be deducted from income when such amounts have been included in income in the current year or prior years. Dividends (other than dividends paid to stockholders as stock dividends) or distributions which represent a return of premiums paid, or deposited, by policy holders are deductible when actually paid to policy holders, or are definitely and irrevocably placed to the credit of policy holders subject to withdrawal on demand; or treated and consummated as a reduction of premiums due from policy holders. Dividends or distributions, which are credited to future premiums payable by policy holders, are not deductible from gross income when such dividends or distributions are not credited or paid to the prospective policy holder unless the policy is renewed. Deductible policy dividends on direct business and reinsurance assumed must be reduced by dividends on reinsurance ceded. 3. Foreign, non-life companies using the apportionment method of reporting income will determine underwriting income on a net basis. No other companies may deduct reinsurance ceded unless the assuming company is, or would be, required to report the income therefrom under the direct accounting method. Generally, this will permit domestic companies to deduct reinsurance ceded to Mississippi companies. 4. In computing losses and claims any estimate for losses incurred but not reported during the taxable year should not be included. As payments on policies, there shall be reported all death, disability and other policy claims paid within the year on Mississippi contracts, including fire, accident and liability losses, matured endowments, annuities, payments on installment policies and surrender values actually paid. All losses and claims paid must be reduced by recoveries from reinsurance ceded, when the reinsurance premiums paid have been taken as a deduction from gross income. 5. The statute provides that there may be deducted "the net additions required by law to be made within the taxable year to reserve funds when such reserve funds are maintained for the purpose of liquidating policies at maturity." Such deductible reserve additions do not include additions to a security reserve, investment reserve or any reserve other than those reserves normally included with and recognized as a part of the true policy reserves. 6. Said additions must reflect reinsurance to the extent that same is reflected in premium income reported. Life companies which do not include in gross income the increase in deferred and uncollected premiums must reduce the net increase in reserves by the increase in net deferred and uncollected premiums. 7. When Mississippi unearned premiums cannot be accounted for specifically by companies which use the direct accounting method of reporting, said premiums shall be computed by taking the ratios on a net basis between company-wide unearned premiums and company-wide net premiums written, by line of business and applying said ratios to the premium income reported, less return premiums, by line of business.

35 Miss. Admin. Code Pt. 3, R. 102 OPERATING EXPENSE:

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Insurance companies should compute their deductions for operating expenses in a manner consistent with the computations of such deductions as shown by the annual statement filed with the Commissioner of Insurance, provided that, adjustments must be made for deductions not allowable under the statute and, provided further that, accruals will be allowed only if income is reported on the accrual basis. Returns, with supporting schedules where necessary, must be reconcilable with the annual statement. 2. The method used in the annual statement in computing home office rent and furniture and equipment expense should be followed on the return. Companies having unrecovered costs in furniture and equipment, because of their departure from the annual statement in prior years, may continue charging depreciation on such items until cost has been recovered. 3. In the case of income determined by direct accounting, when an expense which is specific to Mississippi has been claimed as a direct deduction from Mississippi income, the corresponding expense for all other jurisdictions must be excluded from expenses to be apportioned. When a particular type of income is not reportable to this state because it is beyond its taxing jurisdiction, no expense incurred in earning such income shall be deducted on the return. 4. Companies reporting a part of their investment income to this state must separately apportion non-allocable expenses of the investment department by using the ratio of Mississippi investment income to company-wide investment income. A supplement should be attached to the return for this purpose. 5. Life companies and accident and health companies shall apportion to this state a part of allowable, non-allocable expenses by using the ratio between Mississippi gross premiums and annuity considerations reported and company-wide gross premiums and annuity considerations. "Gross premiums" shall mean direct writing, less return premiums, plus reinsurance assumed. The Commissioner will allow modifications of this formula when it can be shown that greater accuracy will be achieved thereby. Companies having both life and accident and health business must separately apportion expenses of each department. A supplement should be attached to the return for this purpose. 6. The following provisions of this regulation are applicable only to non-life companies determining their Mississippi income by the direct accounting method: a. A part of nonspecific loss adjustment expense shall be apportioned to this state by using the ratio between Mississippi direct losses and company-wide direct losses. b. A part of other allowable non-allocable expenses shall be apportioned to this state by using the ratio between Mississippi gross premiums reported and company-wide gross premiums. "Gross premiums" shall mean direct writings less return premiums, plus reinsurance assumed.

35 Miss. Admin. Code Pt. 3, R. 103 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 104 (Reserved)

Chapter 04 Allocations by Cooperative Associations

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35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

Amounts allocated on the basis of the business done with or for a patron by a cooperative association in cash, merchandise, capital stock, revolving fund certificates, retain certificates, certificates of indebtedness, letters of advice or in some other manner disclosing to the patron the dollar amount allocated, shall be included in the computation of the gross income of such patron for the taxable year in which received to the extent prescribed in the following paragraph of this Regulation. The determination of the extent of taxability of such amounts is in no way dependent upon the method of accounting employed by the patron or upon the method, cash, accrual or otherwise, upon which the taxable income of such patron is computed.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

Amounts allocated to a patron on a patronage basis by a cooperative association with respect to products marketed for such patron, or with respect to supplies, equipment or service, the cost of which was deductible by the patron, shall be included in the computation of the gross income of such patron, as ordinary income to the following extent: 1. If the allocation is in cash, the amount of cash received. 2. If the allocation is in merchandise, the amount of the fair market value of such merchandise at the time of receipt by the patron. 3. If the allocation is in the form of revolving fund certificates, retain certificates, certificates of indebtedness, letters of advice or similar documents, the amount of the fair market value of such document at the time of its receipt by the patron.

35 Miss. Admin. Code Pt. 3, R. 102 Rule 102

Mississippi Law does not conform with Section 1381 et seq., I.R.C. with respect to the tax treatment of corporations operating on a cooperative basis. Patronage dividends, based solely on patronage and not stock ownership, actually paid or distributed to a patron by a corporation operating on a cooperative basis may be deducted by such corporation in determining Mississippi taxable income. Patronage dividends which are retained by the corporation in the form of "per-unit retain allocations" and identified on the books of the corporation as "qualified allocation margins" are not deductible by the corporation and must be included as an element of taxable income for Mississippi income tax purposes, regardless of whether or not the patron signs his or her written notice of allocation (as defined in 26 U.S.C. 1388). Such "per-unit retain allocations," taxable to the corporation, are not taxable to the patron until such allocations are, by vote of the stockholders, actually distributed, in whole or in part, to the patron. Corporations operating on a cooperative basis are not, therefore, treated as "tax-option corporations" under Mississippi Law and no authority for such presently exists.

35 Miss. Admin. Code Pt. 3, R. 103 Rule 103

Section 27-7-29(a)(7) provides that there shall be exempt from the tax imposed by this article "farmers and fruit growers cooperatives or other like organizations organized and operated as sales agents for the purpose of marketing the products of members and turning back to them the proceeds of sales, less the necessary selling expenses and on the basis of the quantity of produce furnished by them, and other nonprofit agricultural associations organized and operated under the provisions of the cooperative marketing association is organized and operated as a nonprofit association within the provisions of the cooperative marketing laws of this state", such cooperative is exempt from income taxation under the

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Mississippi Income Tax Law. Mississippi Law does not conform with Section 1381, IRC, with respect to the levy of an income tax on nonprofit farmers cooperatives.

35 Miss. Admin. Code Pt. 3, R. 104 Rule 104

A corporation or other taxable entity not organized as a nonprofit cooperative marketing association within the scope of the cooperative marketing laws of this state is subject to taxation under the provisions of the Mississippi Income Tax Law in the same manner of any other corporation doing business within the state. Mississippi Law does not conform with Subchapter T of the Internal Revenue Code with respect to the taxation of corporations operating on a cooperative basis. The entire net income of the corporation derived from sources in Mississippi, with the exception of amounts paid in money as patronage dividends to patrons on the basis of the business done with or for such patrons, is subject to the measure of the Mississippi income tax levy. The net income of the corporation (operating on a cooperative basis) shall not be reduced by amount representing qualified written notices of allocation, nonqualified written notices of allocations, per-unit retain allocations, qualified or nonqualified per-unit retain certificates, dividends or other property. Only patronage dividends paid in cash (money) by the corporation to the patron and based solely on business done with or for such patron may be deducted in determining net taxable income of the corporation, other than, of course, ordinary and necessary trade of business expenses.

35 Miss. Admin. Code Pt. 3, R. 105 Rule 105

The patronage dividend received in cash by the patron must be included in the gross income of such patron. The patron may, however, exclude from Mississippi gross income the value of qualified written notices of allocation and qualified per-unit retain certificates to the extent that they represent non-cash items received. Dividends paid by the corporation based on stock ownership rather than patronage are not deductible by the corporation and are included in the gross income of the resident recipient.

35 Miss. Admin. Code Pt. 3, R. 106 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 107 (Reserved)

Chapter 05 Exempt Organizations

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

The following organizations are exempt from taxation under the provisions of the act: 1. Fraternal beneficiary societies, orders or associations. 2. Mutual saving banks, domestic or foreign and farm loan associations when organized and operated on a nonprofit basis and for public purposes. 3. Cemetery corporations; religious, charitable, educational or scientific associations or institutions, including any community chest, funds or foundations, organized and operated 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 inures to the benefit of any private stockholder or individual. 4. Business leagues, labor organizations, agricultural or horticultural associations, chambers of commerce, or boards of trade not organized for profit, and no part of the net earnings of which inures to the benefit of any private stockholder or individual.

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Civic leagues and social clubs or organizations not organized for profit, but operated exclusively for the promotion of social welfare. 6. Clubs organized and operated exclusively for pleasure, recreation and other non- profitable purposes, no part of the net earnings of which inures to the benefit of any private stockholder or member. 7. Farmers and fruit growers cooperatives or other like organizations organized and operated as sales agents for the purpose of marketing the products of members and turning back to them the proceeds of sales, less the necessary selling expenses and on the basis of the quantity of produce furnished by them, and other nonprofit agricultural associations organized and operated under the provisions of the cooperative marketing laws of this state. 8. Nonprofit cooperative electric power associations or corporations, or like associations, when organized and operated for public purposes and when no part of the income inures to the benefit of any private stockholder or individual.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

Corporations and organizations claiming exemption from taxation under the foregoing provisions shall be required to provide good and sufficient evidence to the Commissioner showing their right to exemption as claimed. The burden is upon the corporation or organization claiming exemption to establish same without request by the Commissioner. In no event shall corporations be exempt from providing information at source as to compensation or other items of value paid by them to employees and others, as required by Section 27-7-39.

35 Miss. Admin. Code Pt. 3, R. 102 Rule 102

An application shall be made in behalf of the corporation or association claiming exemption, by the president, secretary or other governing officers thereof, requesting such exemption under Section 27-7-29 and must contain the following information: 1. The character of the organization. 2. The purpose for which it was organized. 3. The actual activities. 4. The sources of income and its disposition. 5. Whether or not any of the net income is credited to surplus or may inure to the benefit of any private individual or stockholder, and if so, in what manner and to what extent. 6. Whether or not exemption from filing federal income tax returns has been granted by the Federal Internal Revenue Service. If not, state reason. 7. If exemption is claimed under paragraph (7) of this regulation, the following data must be furnished: a. The value of products marketed during the year for members, and the value of products marketed for nonmembers. b. The value of purchases made during the year for members, and the value of purchases for nonmembers. c. The value of purchases made during the year for persons, who are neither members nor producers. d. If the organization deals with nonmember patrons, whether or not they are treated the same as members insofar as the charges made for service or the distribution of patronage dividends are concerned.

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In general, all facts relating to the operation of the business which affect the right to exemption.

35 Miss. Admin. Code Pt. 3, R. 103 Rule 103

There must be attached to the application; a certified copy of the articles of incorporation, a certified copy of the by-laws, and a copy of the latest financial statement, showing assets, liabilities, receipts and disbursements of the organization. Also, the statements supporting the claim for exemptions must be sworn to.

35 Miss. Admin. Code Pt. 3, R. 104 Rule 104

When an organization has established its right to exemption, thereafter it shall file annually an affidavit stating the changes, if any, in the character of its organization or operations and shall furnish such additional information as the Commissioner may request.

35 Miss. Admin. Code Pt. 3, R. 105 Rule 105

Corporations and organizations coming within the scope and purview of the exemption authorized by Section 27-7-29, may, in lieu of the application required, file with the Commissioner a copy of the Internal Revenue Service exemption application and determination letter. To the extent that the corporation or organization has been classified by the Internal Revenue Service as exempt under the provisions of Federal Code Section 501 and regulations relating thereto and to the extent that such corporation or organization is not otherwise disqualified for the exemption authorized by the provisions of Section 27-7-29, the Commissioner shall determine such organization as exempt from the filing of income tax returns. Any change made by the Internal Revenue Service in the exempt status of the corporation will automatically and simultaneously cancel the exemption for Mississippi tax purposes. If the corporation whose, exempt status has been changed by the IRS, has reason to believe that its exempt status for Mississippi tax purposes remains unchanged, such corporation, by application may apply to the Commissioner for exemption. The Commissioner may require such additional information or documentation as he may deem necessary and pertinent in determining the exempt status of a corporation or organization making application for exemption on the basis of IRS exemption application and determination letter.

35 Miss. Admin. Code Pt. 3, R. 106 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 107 (Reserved)

Subpart 11 Withholding

Chapter 01 Information at Source

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

Every individual, partnership, corporation, joint stock company or association, insurance company and any other person, including all exempt corporations not subject to tax under the provisions of the act, making payment to another person of interest, rent, salaries, wages, premiums, annuities, compensation, remunerations, emoluments, patronage dividends or other fixed or determinable gains, profits or income must complete an information return, Form 1099, for each payee in instances where such payments to each recipient:

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Exceeds $3,000 annually and embraces salaries, fees, commissions, prizes, bonuses and other income from personal services not otherwise reported as required by Code Section 27-7-311 on Form W-2, or 2. Exceeds $600 annually and embraces dividends, interest, rents, royalties, annuities, pensions, premiums, corporate liquidations and other fixed income.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

Such returns of information shall be completed with respect to calendar year payments, notwithstanding that the payor may report his income on a fiscal year basis, and shall cover total amounts paid for which an information return is required - not just the amount which is in excess of the sums specified in subparagraphs (a) and (b) above.

35 Miss. Admin. Code Pt. 3, R. 102 Rule 102

Annual information returns, Form 1099, shall be forwarded to the Commissioner, along with annual return, Form 62-440, completed by the payor certifying to the accuracy of the information returns attached, not later than March 15 of the following year.

35 Miss. Admin. Code Pt. 3, R. 103 Rule 103

Amounts paid with respect to life insurance, endowment or annuity contracts which are to be included in gross income of the payee are required to be reported on information returns. Payments on such policies which are surrendered before maturity, or on lapsed policies and gifts need not be reported. Amounts of income which would constitute constructive receipt to the payee and be deemed to have been paid should also be reported. Fees for professional services paid to attorneys, physicians, and members of other professions come within the meaning of the term "fixed or determinable gains, profits and income" and are required to be reported on information returns. Amounts distributed or made available under employee's trusts to a beneficiary in any taxable year, and which have been contributed to the trust by the employer or represent earnings of the fund must be reported by the trustee.

35 Miss. Admin. Code Pt. 3, R. 104 Rule 104

The information return, Form 1099, must clearly indicate the name and address to whom and by whom reported payments are made. In the case of payments to individuals, the social security number of such payee must be shown on the return. The federal identification number or the social security number of the payor is required on the return.

35 Miss. Admin. Code Pt. 3, R. 105 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 106 (Reserved)

Chapter 02 Withholding Wages Defined

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

In General. 1. The term "wages" means all remuneration for services performed by an employee for his employer unless specifically excepted under Code Section 27-7-303(j). 2. The name by which the remuneration for services is designated is immaterial. Thus, salaries, fees, bonuses, commissions on sales or on insurance premiums, pensions, and retired pay are wages within the meaning of the statute if paid as compensation for services performed by the employee for his employer.

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The basis upon which the remuneration is paid is immaterial in determining whether the remuneration constitutes wages. Thus, it may be paid on the basis of piece work, or a percentage of profits; and may be paid hourly, daily, weekly, monthly, or annually. 4. Generally the medium in which the remuneration is paid is also immaterial. It may be paid in cash or in something other than cash, as for example, stocks, bonds, or other forms of property. If services are paid for in a medium other than cash, the fair market value of the thing taken in payment is the amount to be included as wages. If the services were rendered at a stipulated price, in the absence of evidence to the contrary, such price will be presumed to be the fair value of the remuneration received. If a corporation transfers to its employees its own stock as remuneration for services rendered by the employee, the amount of such remuneration is the fair market value of the stock at the time of transfer. 5. Remuneration for services, unless such remuneration is specifically excepted by the statute, constitutes wages even though at the time paid the relationship of employer and employee no longer exists between the person in whose employ the services were performed and the individual who performed them.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

Certain specific items. 1. Pensions and retirement pay. In general, pensions and retired pay are wages subject to withholding. However, no withholding is required with respect to amounts paid to an employee upon retirement which are not taxable as annuities under the provisions of Section 27-7-15 nor upon annuities, the income from which is specifically exempt by statute, or regulations with respect thereto. So-called pensions awarded by one to whom no services have been rendered are mere gifts or gratuities and do not constitute wages. Amounts received as retirement pay for service in the Armed Forces of the United States are not subject to withholding. Amounts received as disability benefits by veterans of the armed forces are not subject to withholding. 2. Traveling and other expenses. Amounts paid specifically - either as advances or reimbursements - for traveling or other bona fide ordinary and necessary expenses incurred or reasonably expected to be incurred in the business of the employer are not wages and are not subject to withholding. Traveling and other reimbursed expenses must be identified either by making a separate payment or by specifically indicating the separate amounts where both wages and expense allowances are combined in a single payment. 3. Vacation allowance. Amounts of so-called "vacation allowances" paid to an employee constitutes wages. Thus, the salary of an employee on vacation, paid notwithstanding his absence from work, constitutes wages subject to withholding. 4. Dismissal payments. Any payments made by an employer to an employee on account of dismissal, that is, involuntary separation from the service of the employer, constitute wages subject to withholding regardless of whether the employer is legally bound by contract, statute, or otherwise to make such payments. 5. Deductions by employer from remuneration of an employee. Any amount deducted by an employer from the remuneration of a employee is considered to be a part of

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the employee's remuneration and is considered to be paid to the employee as remuneration at the time that the deduction is made. 6. Payment by an employer of employee's tax, or employee's contribution under a state law. The term "wages" includes the amount paid by an employer on behalf of an employee (without deduction from the remuneration of, or other reimbursement from, the employee) on account of any payment required for an employee under a state unemployment compensation law, or on account of any tax imposed upon the employee by any taxing authority, including federal and state income taxes. 7. Value of meals and lodging. The value of any meals or lodging furnished to an employee by his employer is not subject to withholding if the value of the meals or lodging is excludable from the gross income of the employee. 8. Facilities or privileges. Ordinarily, facilities or privileges (such as entertainment, medical services, or so-called "courtesy" discounts on purchases), furnished or offered by an employer to his employees generally, are not considered as wages subject to withholding if such facilities or privileges are of relatively small value and are offered or furnished by the employer merely as a means of promoting the health, good will, contentment, or efficiency of his employees. 9. Tips or gratuities. Tips or gratuities paid directly to an employee by a customer of an employer are subject to withholding. 10. Fees paid a public official. a. Authorized fees paid to public officials such as notaries public, clerks of court, sheriffs, etc. for services rendered in the performances of their official duties are excepted from wages and hence are not subject to withholding. However, salaries paid such officials of government, or by a government, or by a government agency or instrumentality, are subject to withholding. b. Amounts paid to precinct workers for services performed at election booths in state, county, and municipal elections and fees paid to jurors and witnesses are in the nature of fees paid to public officials and therefore are not subject to withholding. c. Supplemental wage payments. If supplemental wages, such as bonuses, commissions, or overtime, are paid at the same time as regular wages, the income tax to be withheld should be determined as if the aggregate of the supplemental and regular wages were a single wage payment for the regular payroll period. If supplemental wages are paid at a different time, the employer may determine the tax to be withheld by aggregating the supplemental wages either with the regular wages for the current payroll period or with the regular wages for the last preceding payroll period within the same calendar year. However, if income tax has been withheld from the employee's regular wages, the employer may withhold from the supplemental wages as if no exemption had been claimed.

35 Miss. Admin. Code Pt. 3, R. 102 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 103 (Reserved)

Chapter 03 Withholding—Exclusions from Wages

Page 102 of 123

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

In general. The term "wages" does not include any remuneration for services performed by an employee for his employer which is specifically excepted from wages under Code Section 27-7-303(j). The exception attaches to the remuneration for services performed by an employee and not to the employee as an individual; that is, the exception applies only to the remuneration in an excepted category.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

Remuneration for agricultural labor. The term "wages" does not include remuneration for services which constitute agricultural labor and remuneration is not subject to withholding. For the purpose of this subsection, the Commissioner adopts the federal regulations relating to the definition of "agricultural labor," except in those cases where the two laws conflict.

35 Miss. Admin. Code Pt. 3, R. 102 Rule 102

Remuneration for domestic service. 1. In a private home. a. Remuneration paid for services of a household nature performed by an employee in or about a private home of the person by whom he is employed is excepted from "wages" and hence is not subject to withholding. A private home is a fixed place of abode of an individual or family. A separate and distinct dwelling unit maintained by an individual in an apartment house, hotel, or other similar establishment may constitute a private home. If a dwelling house is used primarily as a boarding or lodging house for the purpose of supplying board or lodging to the public as a business enterprise, it is not a private home, and the remuneration paid for services performed therein is not within the exception. b. In general, services of a household nature in or about a private home include services performed by cooks, waiters, butlers, housekeepers, governesses, maids, valets, baby sitters, janitors, laundresses, furnacemen, caretakes, handymen, gardeners, footmen, grooms, and chauffeurs of automobiles for family use. 2. In college club or college fraternity or sorority. a. Remuneration paid for services of a household nature performed by an employee in or about the club rooms or house of a local chapter of a college fraternity or sorority by which he is employed is excepted from wages and hence is not subject to withholding. A local college club or local chapter of a college fraternity or sorority does not include an alumni club or chapter. If the club rooms or house of a local college club or local chapter of a college fraternity or sorority is used primarily for the purpose of supplying board or lodging to students or the public as a business enterprise, the remuneration paid for services performed therein is not within the exception. b. In general, services of a household nature in or about the club rooms or house of a local college club or local chapter of a college fraternity or sorority include services rendered by cooks, waiters, butlers, maids, janitors, laundresses, furnacemen, handymen, gardeners, housekeepers and house-mothers. 3. Remuneration not excepted. Remuneration paid for services not of a household nature, such as services performed as a private secretary, tutor, or librarian, even though performed in the employer's private home or in a local college, club or local

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chapter of a college fraternity or sorority, is not within the exception. Remuneration paid for services of a household nature is not within the exception if performed in or about rooming or lodging houses, boarding houses, clubs (except local college clubs), hotels, hospitals, eleemosynary institutions, or commercial offices or establishments.

35 Miss. Admin. Code Pt. 3, R. 103 Rule 103

Remuneration for Services not in Course of Employer's Trade or Business. 1. Cash remuneration paid for services not in the course of the employer's trade or business performed by an employee for an employer in a calendar quarter is excepted from wages and hence is not subject to withholding unless such employee is regularly employed in the calendar quarter by such employer to perform such services. 2. The term "services not in the course of the employer's trade or business" includes services that do not promote or advance the trade or business of the employer. Remuneration paid for service performed for a corporation does not come within the exception. 3. For purposes of this exception, an individual is deemed to be regularly employed by an employer during a calendar quarter only if— a. Such individual performs service not in the course of the employer's trade or business for such employer for some portion of the day on at least 24 days (whether or not consecutive) during such calendar quarters; or b. Such individual was regularly employed by such employer in the performance of service not in the course of the employer's trade or business during the preceding calendar quarter. 4. In determining whether an employer has performed service not in the course of the employer's trade or business on at least 24 days during a calendar quarter, there shall be counted as one day— a. Any day or portion thereof on which the employee actually performs such service; and b. Any day or portion thereof on which the employee does not perform service of the prescribed character but with respect to which cash remuneration is paid or payable to the employee for such service, such as a day on which the employee is sick or on vacation.

35 Miss. Admin. Code Pt. 3, R. 104 Rule 104

Remuneration for Service Performed by a Minister of a Church or a Member of a Religious Order. 1. In general. Remuneration paid for services performed by a duly ordained, commissioned, or licensed minister of a church in the exercise of his ministry, or by a member of a religious order in the exercise of duties required by such order, is excepted from wages and hence is not subject to withholding. 2. Service by a minister in the exercise of his ministry. Except as provided in paragraph (3) of this subsection, services performed by a minister in the exercise of his ministry includes the ministration of sacerdotal functions and the conduct of religious worship, and the control, conduct, and maintenance of religious organizations, under the authority of a religious body constituting a church or

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church denomination. The following rules are applicable in determining whether services performed by a minister are performed in the exercise of his ministry: a. Whether service performed by a minister constitutes the conduct of religious worship or the ministration of sacerdotal functions depends on the tenets and practices of the particular religious body constituting his church or church denomination. b. Service performed by a minister in the control, conduct, and maintenance of a religious organization relates to directing, managing, or promoting the activities of such organization. Any religious organization is deemed to be under the authority of a religious body constituting a church or church denomination if it is organized and dedicated to carrying out the tenets and principles of a faith in accordance with either the requirements or sanctions governing the creation of institutions of the faith. The term "religious organization" has the same meaning and application as is given to the term for income tax purposes. c. If a minister is performing service in the conduct of a religious worship or the ministration of sacerdotal functions, such service is in the exercise of his ministry whether or not it is performed for a religious organization. d. If a minister is performing service for an organization which is operated as an integral agency of a religious organization under the authority of a religious body constituting a church or church denomination, all service performed by the minister in the conduct of religious worship, in the ministration of sacerdotal functions, or in the control, conduct, and maintenance of such organization is in the exercise of his ministry. e. If a minister, pursuant to an assignment or designation by a religious body constituting his church, performs services for an organization which is neither a religious organization nor operated as an integral agency of a religious organization, all services performed by him even though such service may not involve the conduct of religious worship or the ministration of sacerdotal functions, is in the exercise of his ministry. 3. Service by a minister not in the exercise of his ministry. a. There shall not be excepted from wages subject to withholding remuneration for service performed by a duly ordained, commissioned, or licensed minister of a church which is not in the exercise of his ministry. b. If a minister is performing service for an organization which is neither a religious organization nor operated as an integral agency of a religious organization and the service is not performed pursuant to an assignment or designation by his ecclesiastical superiors, then only the service performed by him in the conduct of religious worship or the ministration of sacerdotal functions is in the exercise of his ministry. 4. Service in the exercise of duties required by a religious order. Service performed by a member of a religious order in the exercise of duties required by such order includes all duties required of the member by the order. The nature or extent of such service is immaterial so long as it is a service which he is directed or required to perform by his ecclesiastical superiors.

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35 Miss. Admin. Code Pt. 3, R. 105 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 106 (Reserved)

Chapter 04 Withholding—Employee Defined

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

The term "employee" includes every individual performing services if the relationship between him and the person for whom he performs such services is the legal relationship of employer and employee. The term includes officers and employees, whether elected or appointed, of the United States, a state, or any political subdivision thereof, or any agency or instrumentality of any one of the foregoing.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

Generally the relationship of employer and employee exists when the person for whom services are performed has the right to control and direct the individual who performs the services, not only as to the result to be accomplished by the work but also as to the details and means by which that result is accomplished. That is, an employee is subject to the will and control of the employer not only as to what shall be done but how it shall be done. In this connection, it is not necessary that the employer actually direct or control the manner in which the services are performed; it is sufficient if he has the right to do so. The right to discharge is also an important factor indicating that the person possessing that right is an employer. Other factors characteristic of an employer, but not necessarily present in every case, are the furnishing of tools and the furnishing of a place to work to the individual who performs the services. In general, if an individual is subject to the control or direction of another merely as to the result to be accomplished by the work and not as to the means and methods for accomplishing the result, he is not an employee.

35 Miss. Admin. Code Pt. 3, R. 102 Rule 102

If the relationship of employer and employee exists, the designation or description of the relationship by the parties as anything other than that of employer and employee is immaterial. Thus, if such relationship exists, it is of no consequence that the employee is designated as a partner, coadventurer, agent, independent contractor, or the like.

35 Miss. Admin. Code Pt. 3, R. 103 Rule 103

All classes or grades of employees are included with the relationship of employer and employee. Thus, superintendents, managers, and other supervisory personnel are employees. Generally, an officer of a corporation is an employee of the corporation. However, an officer of a corporation who as such does not perform any services or performs only minor services and who neither receives nor is entitled to receive, directly or indirectly, any remuneration is not considered to be an employee of the corporation. A director of a corporation in his capacity as such is not an employee of the corporation.

35 Miss. Admin. Code Pt. 3, R. 104 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 105 (Reserved)

Chapter 05 Withholding—Employer Defined

Page 106 of 123

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

The term "employer" means any person for whom an individual performs or performed any service, of whatever nature, as the employee of such person.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

It is not necessary that the services be continuing at the time the wages are paid in order that the status of the employer exist. Thus, for the purposes of withholding, a person for whom an individual has performed past services for which he is still receiving wages from such person is an "employer."

35 Miss. Admin. Code Pt. 3, R. 102 Rule 102

An employer may be an individual, a corporation, a partnership, a trust, an estate, a joint-stock company, an association, or a syndicate, group, pool, joint venture, or other unincorporated organization, group or entity. A trust or estate, rather than the fiduciary acting for or on behalf of the trust or estate, is generally the employer.

35 Miss. Admin. Code Pt. 3, R. 103 Rule 103

The term "employer" embraces not only individuals and organizations engaged in trade or business, but organizations exempt from income tax, such as religious and charitable organizations, educational institutions, clubs, social organizations and societies, as well as the government of the United States, the State of Mississippi, counties, municipalities, their agencies, instrumentalities, and political subdivisions.

35 Miss. Admin. Code Pt. 3, R. 104 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 105 (Reserved)

Chapter 06 Withholding—Payroll Period Defined

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

The term "payroll period" means a period of which a payment of compensation is ordinarily made to the employee, whether weekly, biweekly, semi-monthly, monthly, quarterly, or daily, or any other fixed period.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

For the purpose of income tax withholding, an employee can have only one payroll period for wages paid by any one employer. If an employee has a regular payroll period, the tax should be withheld on the basis of that regular period even though the employee does not work the full period. If a specified payroll period on one of the above basis cannot be established, the tax shall be withheld on a per diem basis.

35 Miss. Admin. Code Pt. 3, R. 102 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 103 (Reserved)

Chapter 07 Withholding of Tax—Requirements of

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

The employer is required to collect the tax by deducting and withholding the amount thereof from the employee's wages as and when paid, either actually or constructively. Wages are constructively paid when they are credited to the account of or set apart for an employee so that they may be drawn upon by him at any time although not then actually reduced to possession. To constitute payment in such a case, the wages must be credited to

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or set apart for the employee without any substantial limitation or restriction as to the time or manner of payment or condition upon which payment is to be made, and must be made available to him so that they may be drawn upon at any time, and their payment brought within his own control and disposition.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

Notwithstanding any other provisions of Section 27-7-301 et seq., an employer shall not deduct and withhold any tax upon a payment of wages made to an employee if there is in effect, with respect to the payment, a Mississippi withholding exemption certificate furnished to the employer by the employee which contains, or which is attached thereto, statements that— 1. The employee incurred no liability for income tax imposed under the Mississippi income tax law for his preceding taxable year; and 2. The employee anticipates that he will incur no liability for income tax under the Mississippi income tax law for his current taxable year.

35 Miss. Admin. Code Pt. 3, R. 101.01 Rule 101.01

The purpose of this Section is to exempt certain taxpayers who work only a part of the year, such as students and retired persons, from the requirements of Mississippi income tax withholding and to relieve such persons from the necessity of filing a return solely for the purpose of securing a refund of the total amount withheld. Both conditions as set forth above must be met before the total withholding exemption is valid.

35 Miss. Admin. Code Pt. 3, R. 101.02 Rule 101.02

Generally, individuals who meet the above requirements are the following: 1. Single persons with annual gross income of less than $8,300 (1981 and thereafter). 2. Head-of-family with a dependent child with an annual gross income of less than $12,900 (1981 and thereafter). 3. Married individuals entitled to file jointly with a combined joint income of less than $12,900 (1981 and thereafter). For 1979 and thereafter, add $1500 for each dependent. 4. Married individuals filing separate returns (2 returns) where the gross income of each is less than $6,450 (1981 and thereafter). For 1979 and after, add $750 for each dependent.

35 Miss. Admin. Code Pt. 3, R. 102 Rule 102

When an employee furnishes his employer with a withholding exemption certificate containing the required statements for exemption, the employer may give effect to the certificate within thirty (30) days after the certificate was furnished, or the employer, if he wishes, may give immediate effect. A certificate remains in effect, in the case of a calendar year employee-taxpayer, through April 30 of the following calendar year. For a fiscal year employee-taxpayer a certificate remains effective through the last day of the fourth month following his taxable year. A new certificate must then be filed if the exemption is to be continued.

35 Miss. Admin. Code Pt. 3, R. 103 Rule 103

If an employer receives a withholding exemption certificate, with statements as to non- liability for withholding tax, which appears to be false or which is not within the intent and the purpose of this section, the employer shall consider such certificate a nullity for purposes of computing withholding tax; the employer shall inform the employee who submitted the certificate that it is invalid; and shall request another withholding exemption

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certificate from the employee. If the employee who submitted the invalid certificate fails to comply with the employer's request, the employer shall withhold from the employee on the basis of a zero exemption.

35 Miss. Admin. Code Pt. 3, R. 104 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 105 (Reserved)

Chapter 08 Credit for Tax Withheld

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

An employee from whose wages tax is withheld should claim credit for the tax withheld on his income tax return for the calendar year during which the tax was withheld. Credit will be allowed only if a proper copy of his withholding statement, Form W-2, or other authorized wage and tax statement, is attached to his return. A fiscal-year taxpayer should claim credit for the tax withheld on his return for his fiscal year beginning in the calendar year during which the tax was withheld. For example, a taxpayer having a fiscal year ending July 31 is entitled to credit for tax withheld during the calendar year 1986 on his return for his fiscal year ending July 31, 1987. If more than one tax year begins during the calendar year during which the tax was withheld, the credit should be claimed on the return for the last such taxable year.

35 Miss. Admin. Code Pt. 3, R. 101 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 102 (Reserved)

Chapter 09 Employees Subject to Withholding

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

Resident employees. 1. Resident employees rendering services exclusively in Mississippi are subject to withholding computed upon total wages received. Resident employees rendering services partly within and partly without the state are likewise subject to withholding on total wages, except in instances where the nature of the business activity of his employer requires registration with another state for withholding on wages for services rendered by the resident employee in the foreign state. So as to avoid duplicate withholding on the same wages, those wages of a resident employee realized from services in another state may be excluded from Mississippi withholding to the extent that income tax is withheld for another state. If tax is not withheld for another state, the employer is required to withhold on the total wages of resident employees regardless of where the wages were earned or realized. 2. Resident employees performing services in Mississippi for nonresident employers or foreign corporations are subject to withholding computed on total wages. Resident employees in this category performing services partly within and partly without Mississippi are likewise subject to withholding on total wages except in those instances where withholding is required by another state on wages for services rendered by the resident in another state. To the extent that withholding is

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not required by another state on wages of a resident for services rendered there, Mississippi withholding should be computed on total wages. 3. Resident employees who commute each working day to a location outside Mississippi and who realize wages for services performed in another state are subject to Mississippi withholding on total wages to the extent that the state in which the wages are earned does not impose an individual income tax on such wages. 4. Employers, whether resident or otherwise, having employees who realize wages from services performed within this state are required to register for withholding as provided by Reg. 1116. Out-of-state employers making payment of wages to Mississippi residents for services rendered out of state, to the extent subject to withholding within the activity described in Paragraph (a)(3) of this regulation, are required to register where such employers are likewise qualified to do business in Mississippi, doing business in Mississippi, or otherwise within the taxing jurisdiction of this state. Other out-of-state employers so involved are requested to voluntarily register.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

Nonresident employees. Nonresident employees rendering services exclusively in Mississippi are subject to withholding computed upon total wages received, as in the case of a resident. If the nonresident's services are performed partly within and partly without the state, only wages paid for services performed within Mississippi are subject to withholding. The burden and duty is placed upon the employer to determine the place of residence of each employee, and to determine the exact part of each employee's earnings which is attributable to services performed within Mississippi and to apportion such earnings accordingly for the purpose of withholding the tax. When a nonresident officer or employee of a corporation has his base situs in Mississippi and earns his salary, wages, or commissions while assigned to or traveling from the Mississippi base, the total wages received incident thereto are subject to Mississippi withholding.

35 Miss. Admin. Code Pt. 3, R. 102 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 104 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 105 (Reserved)

Chapter 10 Employer Liable—Failure to Withhold

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

If the employer in violation of the provisions of section 27-7-305 fails to deduct and withhold the tax, the employer is liable therefore as provided by statute. If thereafter the income tax against which the tax under section 27-7-305 may be credited is paid, the tax under section 27-7-305 shall not be collected from the employer. Such payment does not, however, operate to relieve the employer from liability for penalties or additions to the tax applicable in respect of such failure to deduct and withhold. The employer will not be relieved of his liability for payment of the tax required to be withheld unless he can show

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that the tax against which the tax under section 27-7-305 may be credited has been paid. See section 27-7-345 relating to interest and penalties.

35 Miss. Admin. Code Pt. 3, R. 101 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 102 (Reserved)

Chapter 11 Report of Income Tax Withheld

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

Every employer who withheld or was required to withhold Mississippi income tax from wages is required to make a monthly or quarterly return on "Employers Return of Mississippi Income Tax Withheld." For monthly returns, Form 62-405 shall be required when the tax withheld or required to be withheld exceeds $300 per month. This monthly return must be filed and the tax paid on or before the 15th day of the month following the month for which such amounts were withheld. If the amount of tax withheld or required to be withheld is less than $300, the withheld tax may, with the approval of the Commissioner, be filed on a quarterly return.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

The quarterly return (Form 62-400) shall be filed and the tax paid on or before the 15th day of the month following the calendar quarter for which such amounts were withheld. The Commissioner may also require the filing of monthly returns by employers specified by Section 27-7-309(2) and 27-7-309(3).

35 Miss. Admin. Code Pt. 3, R. 102 Rule 102

An employer who has become liable to file a return under a particular filing period (monthly or quarterly) must continue on that basis until a final return is filed or permission to change has been granted by the Commissioner.

35 Miss. Admin. Code Pt. 3, R. 103 Rule 103

The return of a governmental employer should be made by the person designated for that purpose or having control over payment of wages. If a consolidated return and remittance of the tax withheld cannot be made by the employer because of the complexity of his organization, he may designate certain branch offices or divisions as withholding agents. These agents would then perform the actual withholding and remitting. However, regardless of any internal arrangements which may be established by these "complex employers", the legal responsibility and liability under the law still rest with the home office. In such cases, each division or agency filing a return shall have a separate registration and identification number.

35 Miss. Admin. Code Pt. 3, R. 104 Rule 104

Preprinted withholding tax coupon booklets are mailed to employers (Form 62-400) for quarterly and (Form 62-405) for monthly fliers and these forms should be used in filing returns. Should an employer fail to receive a form, he should tender the tax withheld so as to assure that the return be postmarked not later than the regular due date. Such remittance should be accompanied by a letter from the employer stating failure to receive a reporting form, giving employer identification number, reporting period, and stating name and current mailing address of the employer. Failure to receive a reporting form does not relieve the employer of his obligation to pay the tax by the regular due date. The last report

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filed by the employer who either goes out of business or otherwise ceases to pay wages subject to withholding must be marked "final return".

35 Miss. Admin. Code Pt. 3, R. 105 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 106 (Reserved)

Chapter 12 Payment of Income Tax Withheld

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

All moneys withheld in accordance with the provisions of the Mississippi Income Tax Withholding Act of 1968, as amended, shall be deemed to be held by the employer in trust for the State of Mississippi, and shall be recorded by the employer in a ledger account so as to clearly indicate the amount of tax so withheld, and that such amount is the property of the State of Mississippi.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

Quarterly or monthly returns must be filed by each employer with the Commissioner on forms made available by the Commissioner for that purpose, and such returns must be accompanied with a remittance from the employer for the full amount of the tax withheld by him for that quarter.

35 Miss. Admin. Code Pt. 3, R. 102 Rule 102

Any employer who fails either to withhold the required tax or pay it to the Commissioner as specified, or both, is liable to the state for the full amount of all taxes on the income paid by him to his employees for the period for which he failed to report or turn over the same, together with all interest and penalties accrued. Any employer who fails to deduct, withhold or remit moneys or to furnish to any individual information statements, or maintain records as required is guilty of a misdemeanor.

35 Miss. Admin. Code Pt. 3, R. 103 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 104 (Reserved)

Chapter 13 Reports of Withholding—Correcting Mistakes

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

If more than the correct amount of tax is paid to the Commissioner, proper adjustment may be made on the first monthly or quarterly return filed after the error is discovered. If less than the correct amount of tax is paid to the Commissioner, an amended report with remittance must be filed immediately. If a mistake in income tax withholding cannot be adjusted on a return for a subsequent period of the same calendar year, the Commissioner should be consulted for the proper method of correction.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

The employer is authorized to deduct the amount of the under-collection from later payments to the employee, if none or less than the correct amount of the tax is deducted from any wage payment. However, the employer is liable to the Commissioner for any underpayment. Reimbursement of the employer is a matter of settlement between the employer and the employee. The over-collection shall be repaid to the employee, if more than the correct amount of tax is deducted from any wage payment. Every over-collection

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for which the employer does not have evidence of repayment to the employee must be reported and paid to the Commissioner with the return for the filing period in which the over-collection was made.

35 Miss. Admin. Code Pt. 3, R. 102 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 103 (Reserved)

Chapter 14 Wage and Tax Statements and Reports

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

On or before the date prescribed by the Commissioner, each employer must transmit to the Commissioner in the format and manner prescribed all wage and tax statements (Form W- 2 or other withholding statements) and reports for the year.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

An extension of time for the submission of wage and tax statements and accompanying reports may be granted by the Commissioner.

35 Miss. Admin. Code Pt. 3, R. 102 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 103 (Reserved)

Chapter 15 Statement Furnished Employees

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

Each employer, on or before January 31 of each year or within thirty (30) days after termination of the employment, shall furnish each employee, whose wages were subject to withholding whether or not tax was withheld on such payments, a withholding statement in duplicate showing: 1. Total wages paid. 2. Amount of Mississippi income tax withheld. 3. Amount of federal income tax withheld. 4. Name and address of employee. 5. Social Security number of employee. 6. Name, address and Mississippi identification number of employer. 7. Period of employment - calendar year unless indicated otherwise.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

Wages should include all remuneration paid to the employee, whether paid in cash or otherwise. Wages should be reported on form W-2 and should provide the same level of detail as prescribed by the Internal Revenue Service and such other information as required by the Commissioner. Each statement should identify wages regardless of source, as well as on a state by state basis. The withholding for each state should be identified as well.

35 Miss. Admin. Code Pt. 3, R. 102 Rule 102

The withholding statement for each employee should be prepared on Federal Form W-2. The original state copy should be filed with the Commissioner in the format and manner prescribed. Two copies should be given to the employee (one of which is required to be attached to the individual income tax return filed by the employee and the other retained by the employee); and a copy should be retained by the employer.

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35 Miss. Admin. Code Pt. 3, R. 103 Rule 103

If it becomes necessary to correct Form W-2 after it has been given to an employee, a corrected statement should be issued to the employee and a copy mailed to the Commissioner, such copy to be clearly marked "corrected by employer."

35 Miss. Admin. Code Pt. 3, R. 104 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 105 (Reserved)

Chapter 16 Determination of Income Tax to be Withheld

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

The amount of income tax to be withheld must be determined in accordance with withholding tables prepared by the Commissioner. Withholding tables show amounts to be withheld for daily, weekly, biweekly, semi-monthly, and monthly payroll periods.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

Employers using electronic data processing equipment for payroll computations may use special formulas adapted to the machines, if the result will be consistent with the withholding tables prepared by the State Tax Commission. A computer payroll accounting flowchart is furnished in the Income Tax Withholding Tables Booklet.

35 Miss. Admin. Code Pt. 3, R. 102 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 103 (Reserved)

Chapter 17 Registration of Employers

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

The Mississippi Income Tax Withholding Act of 1968, as amended, became effective as of January 1, 1969. All employers subject to the provisions of the act on that date are required to be registered for withholding. All new employers must register in time to begin withholding from the inception of their business. Form 60-007 must be completed by each employer subject to the provisions of the act. Application for registration may be obtained by writing to the Withholding Tax Section, Income Tax Division, State Tax Commission, Post Office Box 960, Jackson, Mississippi 39205. All information requested thereon must be furnished in detail.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

The Identification Number assigned by the Internal Revenue Service for federal income tax withholding purposes is likewise used for state withholding purposes and such number becomes the identification number of the employer. In making application for registration, the employer should indicate his federal I.D. number on his registration application. If a federal I.D. number has not been applied for or assigned, the Mississippi application should not be delayed, but such number should be furnished as soon thereafter as possible.

35 Miss. Admin. Code Pt. 3, R. 102 Rule 102

Once an employer has made application for withholding registration, the employer is registered as a withholding agent for the State of Mississippi and should begin immediately to withhold Mississippi income tax applicable to the payment of wages to his employees. The Commissioner will mail to the employer, approximately thirty (30) days before the due date, all reports, including instructions, that must be submitted after the close of the filing

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period. A report should be filed with the Commissioner for each monthly or quarterly filing period, Form 62-405 for monthly and 62-400 for quarterly, which would be in the preprinted coupon booklet. In the event no tax is due, a negative return nonetheless should be filed. For additional information on filing of returns and payment of tax refer to Regulations 1111 and 1112.

35 Miss. Admin. Code Pt. 3, R. 103 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 104 (Reserved)

Chapter 18 Withholding Exemption Certificates

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

On commencement of employment. On or before the date on which an individual commences employment with an employer, the individual shall furnish the employer with a signed withholding exemption certificate (Form 62-420) relating to the amount of withholding exemption to which he is entitled. The employer is required to request a withholding exemption certificate from each employee, but if the employee fails to furnish such certificate, such employee shall be considered as claiming no withholding exemption and the employer is required to withhold on that basis.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

Change in exemptions. If, on any day during the calendar year, the amount of withholding exemption to which the employee is entitled is increased or decreased, an amended certificate should be filed by the employee with his employer within ten (10) days from the date of such change. Exemption certificates filed by the employee shall remain in force until amended by the employee.

35 Miss. Admin. Code Pt. 3, R. 102 Rule 102

More than one employer. If an employee has more than one employer at the same time, he may claim his exemptions with only one employer.

35 Miss. Admin. Code Pt. 3, R. 103 Rule 103

Excessive exemption. The employer is not required to ascertain whether or not the amount of exemption claimed by the employee is greater than the amount of exemption to which the employee is entitled, provided the exemption claimed is not in excess of that authorized by law. If, however, the employer has reason to believe that the amount of withholding exemption claimed by the employee is greater than the amount to which the employee is entitled, the State Tax Commission should be so advised.

35 Miss. Admin. Code Pt. 3, R. 104 Rule 104

Amount of exemption. The amount of exemption to which an employee is entitled to on any day depends upon his status as a single or married individual, head of family, or the number of dependents claimed.

35 Miss. Admin. Code Pt. 3, R. 104.01 Rule 104.01

The amount of exemption to which an individual is entitled is as follows: 1. Single individuals—for Calendar year 1981 and thereafter—$6,000 2. Married individuals—for Calendar year 1981 and thereafter—$9,500 In instances where husband and wife are both employed, the joint personal exemption plus any allowable additional exemptions (dependents, blindness or age) may be divided between the spouses, in multiples of $500, in any manner they may

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choose so long as the total amount of exemptions claimed by both spouses does not exceed the amount of exemption authorized by law. Effective, however, January 1, 1979, Section 27-7-21 provides that married individuals electing to file separate returns (two returns) must, on filing of such returns, divide the exemptions equally between the two spouses. If married individuals contemplate filing two separate returns, they should equally divide the exemptions in completing the Employee Withholding Exemption Certificate as filed with their respective employers. Married individuals who contemplate filing a joint or combined return (one return) may continue to divide the exemption between them in any manner they choose. 3. Head-of-family—for Calendar year 1981 and thereafter—$9,500 See Section 27-7-21 for definition of head-of-family. 4. Dependents—for Calendar year 1979 and thereafter—$1,500 An additional exemption may be claimed for each dependent of the taxpayer if such dependent qualifies as a dependent for federal income tax purposes, except for the one dependent that qualifies a taxpayer for the head of family status. Dependents do not include taxpayer and spouse. Married individuals may divide the number of their dependents between them in any manner they choose. See, however, the warning under paragraph (2) relating to married individuals filing separate returns (two returns). 5. Age 65 and over—for Calendar year 1979 and thereafter—$1,500 An additional exemption may be claimed by either taxpayer or spouse or both if either or both have reached the age of 65 before the close of the taxable year. No additional exemption is authorized for dependents by reason of age. 6. Blind—for Calendar year 1979 and thereafter—$1,500 An additional exemption may be claimed by either taxpayer or spouse or both if either or both are blind. No additional exemption is authorized for dependents by reason of blindness.

35 Miss. Admin. Code Pt. 3, R. 105 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 106 (Reserved)

Chapter 20 Records to be Kept by Employer 100 Every employer required to deduct and withhold the tax shall keep and preserve for a period of three (3) years after the date the tax which they relate became due, on the date the tax is paid, whichever is later, the following records and information: 1. Name, address, social security number and period of employment of all employees receiving compensation from the employer. 2. Amounts and dates of all wage payments subject to the Mississippi income tax withholding. 3. Employee's state income tax withholding exemption certificates. 4. Employer's state income tax withholding registration number. 5. In the case of nonresidents, record of allocation of working days in the State of Mississippi. 6. Records of quarterly or monthly returns including dates and amounts of payment. 7. All other wage, tax, and income/information statements and reports required to be filed with the Commissioner.

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35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

In all cases, the employer should maintain such other records in addition to those detailed above which he feels will assist the commission in auditing records or verifying the liability reported. Any employee’s copies of the wage and tax statement (Form W-2) which cannot be delivered to the employee after reasonable effort is exerted should be retained by the employer for a three year period.

35 Miss. Admin. Code Pt. 3, R. 102 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 103 (Reserved)

Chapter 21 Estimated Tax Payments

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

INDIVIDUAL ESTIMATED TAX PAYMENTS. 1. Every individual taxpayer who does not have at least eighty percent (80%) of his annual tax liability prepaid through withholding must make estimated tax payments if his annual tax liability exceeds two hundred dollars ($200). Every estate or trust with an annual income tax liability in excess of two hundred dollars ($200) must make estimated tax payments. These estimated tax payments must not be less than eighty percent (80%) of the annual income tax liability. Any taxpayer who fails to file the estimated tax return and pay the tax within the time prescribed or underestimates the required amount shall be liable for interest of one percent (1%) per month on underpayment of tax from the date payment is due until paid. 2. The total estimated tax may be paid on or before the fifteenth day of the fourth month of the income year of the taxpayer or, at the election of the taxpayer, the estimated tax may be paid in four equal installments on forms furnished by the Commissioner. The returns and payments are due on or before: a. The 15th day of the 4th month of the income year, b. The 15th day of the 6th month of the income year, c. The 15th day of the 9th month of the income year, d. The 15th day of the 1st month after the close of the income year. 3. Exceptions: No interest will be charged for underpayment of estimated tax if the estimated tax payments for current year are equal to or more than the prior year's tax liability provided a return was filed and the return covered a period of twelve (12) months. If the taxpayer was not required to file a Mississippi resident return for the prior year, the estimated tax payments must be equal to or more than the tax liability computed on prior year's income based on Mississippi current year's rates and exemption.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

CORPORATE ESTIMATED TAX PAYMENTS. 1. Every corporate taxpayer with an annual income tax liability in excess of two hundred dollars ($200) must make estimated tax payments. These estimated tax payments must not be less than ninety percent (90%) of the annual income tax liability. Any taxpayer who fails to file an estimated tax return and pay the tax within the time prescribed or underestimates the required amount shall be liable for

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penalty of ten percent (10%) plus interest of one percent (1%) per month on underpayment of tax from the date payment is due until paid. 2. The total estimated tax may be paid on or before the fifteenth day of the fourth month of the income year of the taxpayer or, at the election of the taxpayer, the estimated tax may be paid in four equal installments on forms furnished by the Commissioner. The returns and payments are due on or before: a. The 15th day of the 4th month of the income year, b. The 15th day of the 6th month of the income year, c. The 15th day of the 9th month of the income year, d. The 15th day of the 12th month of the income year. 3. Exceptions: a. No interest or penalty will be charged for underpayment of estimated tax, except "large" corporations, if the estimated tax payments for current year are equal to or more than the prior year's tax liability provided a return was filed and the return covered a period of twelve (12) months. A "large corporation" - one with Mississippi taxable income of at least $1 million in any one of the three immediately preceding tax years -is prohibited from using its prior year's tax liability, except in determining the first installment of its tax year. Any reduction in a large corporation's first installment as a result of using the prior year's tax must be recaptured in the corporation's second installment. In applying the $1 million test, taxable income is computed without regard to net operating loss or capital loss carryforwards or carrybacks. The estimated tax payments on large corporations must be at least ninety percent (90%) of the actual tax due for the current tax year. b. If the reporting corporation of a controlled group of corporations filing in Mississippi and using the consolidated or combined income tax return election reports at least $1 million of Mississippi taxable income, which is made up of the sum of all income or losses of the members of the group, then the group and/or reporting corporation will be considered a large corporation even if another member of the group becomes the reporting corporation. Additionally, if one or more members of a controlled group of corporations filing in Mississippi using the consolidated or combined income tax return election reports at least $1 million of taxable income then the group will be considered a large corporation even though the sum of all income or losses of the members of the group is less than $1 million as reported by the reporting corporation. c. A corporation may annualize its income for estimated tax payments, but the total estimated tax payments for the tax period must be at least ninety percent (90%) of the tax on the basis of current Mississippi income and must be paid by the last estimate date. d. A corporation may not use more than one exception. It cannot annualize and also use last year's tax paid. e. If a corporation is classified as a large corporation and is merged, liquidated or combined in any fashion into a corporation which is not classified as a large corporation, then the surviving corporation will be classified as large corporation.

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35 Miss. Admin. Code Pt. 3, R. 102 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 103 (Reserved)

Chapter 22 Withholding on Gambling Winnings

35 Miss. Admin. Code Pt. 3, R. 100 Definitions

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

Gaming establishment means any establishment where gambling games are conducted or operated within this state and any party that provides or is responsible for the payment of cash or other remuneration resulting directly or indirectly from play at gambling games within this state. Gaming establishments include those establishments required to be licensed under the Mississippi Gaming Control Act, establishments which would be licensed under the Mississippi Gaming Control Act but for a federal preemption, and the Mississippi Lottery Corporation.

35 Miss. Admin. Code Pt. 3, R. 102 Rule 102

Gaming winnings includes all amounts that are paid, whether in cash or other form, by gaming establishments to patrons which are subject to the withholding and/or reporting requirements of the Internal Revenue Code (IRC) as specified in Miss. Code Ann. Sections 27-7-901 and 27-7-903. Such amounts are not limited to cash or remuneration from play at a gambling game, but include, without limitation, amounts considered prizes, awards, tournament winnings or similar types of compensation. There is no reduction for tax withholdings or other reserves and may not be less than the amount reported for federal tax purposes. This is the amount that is subject to the withholding or reporting requirements of the IRC.

35 Miss. Admin. Code Pt. 3, R. 103 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 200 General Requirements

35 Miss. Admin. Code Pt. 3, R. 201 Rule 201

According to Miss. Code Ann. Section 27-7-901, there is a three percent (3%) tax levy of the amount of gaming winnings received from gaming establishments licensed by the Mississippi Gaming Control Act which shall be withheld and remitted by the gaming establishment.

35 Miss. Admin. Code Pt. 3, R. 202 Rule 202

According to Miss. Code Ann. Section 27-7-903, there is a three percent (3%) tax levied of the amount of gaming winnings received from gaming establishments not licensed by the Mississippi Gaming Control Act. The Department of Revenue may enter into tax collection agreements regarding this tax with the gaming establishment.

35 Miss. Admin. Code Pt. 3, R. 203 Rule 203

The gaming establishment must register to withhold Mississippi income tax in the same manner as stated in Title 35, Part III, Subpart 11 Chapter 17 of the Mississippi Administrative Code, Registration of Employers. The withholding account used to report the withholding on wages cannot be used to report withholding on gaming winnings. A separate account for withholding on gaming winnings must be obtained from the

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withholding division of the Mississippi Department of Revenue. A monthly return must be filed and the tax paid on or before the 15th day of the month following the month for which such amounts were withheld.

35 Miss. Admin. Code Pt. 3, R. 204 Rule 204

Gaming establishments are not required to complete the Mississippi withholding exemption certificate form for gaming winnings. However, the gaming establishment must keep the following records and information for three (3) years after the date the tax becomes due or is paid, whichever is later: 1. Total gaming winnings paid. 2. Amount of Mississippi income tax withheld. 3. Name, address and social security or identification number of the party in receipt of gaming winnings. 4. Name, address and Mississippi identification number of the gaming establishment. 5. Payment period -- calendar year unless indicated otherwise.

35 Miss. Admin. Code Pt. 3, R. 205 Rule 205

Each gaming establishment, in the form and manner prescribed by the Commissioner, shall prepare Federal Form W-2Gs, or other federal forms which are used to report income for federal tax purposes with the preceding information for those patrons whose gaming winnings were subject to Mississippi withholding. If the federally prescribed information return does not allow for the recording of both state income and state tax withholdings, then a W-2G should be completed and attached as part of the filing.

35 Miss. Admin. Code Pt. 3, R. 206 Rule 206

The original state copy is filed in accordance with Title 35, Part III, Subpart 11 Chapter 14 of the Mississippi Administrative Code.

35 Miss. Admin. Code Pt. 3, R. 207 Rule 207

If it becomes necessary to correct Form W-2G after it has been given to a patron, a corrected statement should be mailed to the Commissioner, such copy to be clearly marked "corrected by gaming establishment." In case a withholding statement is lost or destroyed, a substituted copy may be issued marked "reissued by gaming establishment."

35 Miss. Admin. Code Pt. 3, R. 208 Rule 208

Multi-period payoffs: If a patron is entitled to receive either a lump-sum payment or a series of periodic payments received at least annually, then a levy of 3% is levied on the lump-sum amount in the year it is constructively received under the constructive receipt doctrine. The constructive receipt doctrine does not apply to lottery winnings. The 3% levy is a liability of the Mississippi gaming establishment which was a party to the wager, regardless of whether it is the paying agent.

35 Miss. Admin. Code Pt. 3, R. 209 Rule 209

The Commissioner will follow Federal Rules, Regulations, and Revenue Procedures relating to gaming winnings to the extent that such procedures are not deemed contrary to the context and intent of Mississippi Law.

35 Miss. Admin. Code Pt. 3, R. 210 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 300 Thresholds for Withholding Requirements

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35 Miss. Admin. Code Pt. 3, R. 301 Rule 301

Lottery proceeds of six hundred dollars ($600.00) or more are subject to withholding under Miss. Code Ann. Section 27-115-43.

35 Miss. Admin. Code Pt. 3, R. 302 Rule 302

Keno gaming winnings of one thousand five hundred dollars ($1,500.00) or more, reduced by wager, are subject to withholding. Keno tournaments have the same threshold amount prior to becoming subject to withholding.

35 Miss. Admin. Code Pt. 3, R. 303 Rule 303

Slot or Bingo gaming winnings of one thousand two hundred ($1,200.00) or more, not reduced by wager, are subject to withholding. Slot or Bingo tournaments have the same threshold amount prior to becoming subject to withholding.

35 Miss. Admin. Code Pt. 3, R. 304 Rule 304

The thresholds for withholding vary for tournaments, other than those for slots, Bingo, or Keno, such as poker tournaments, depending on the odds involved in the tournament, the amount of the proceeds won and whether there is an entry fee. In regard to these other tournaments, gaming establishments shall withhold and remit based on this chart:

Tournament Reporting and Withholding

Footnote: • Proceeds are reduced by the wager (entry fee paid). • If the entry fee is paid by the participant, only a W-2G can be issued (tournament contributions by the company are irrelevant). • Reporting and withholding is not triggered until the participant cashed out (final round). • For reporting and withholding requirements under the IRC on gambling winnings of nonresident aliens, see instructions to IRS Form 1042-S and IRS Entry Fee Payout Over $600 AND Odds Greater than 300-1 Issue W-2G and withhold Issue 1099 if over $600 and withhold Payout Over $5,000 No Reporting or Withholding Issue W-2G and withhold No No Yes Yes Yes No

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Publication 515 or any replacement thereof. The gaming establishment should substitute a 1042-S for the W-2G or 1099 MISC. Examples: • Patron pays tournament entry fee and wins satellite tournament. Patron receives no cash but does move on to next round. W-2G reporting and withholding is only triggered when patron cashes out. The reportable amount is reduced by the entry fee (subject to above flowchart). • Patron pays tournament entry fee and wins tournament. Patron receives no cash but does receive a paid (comp’d) entry fee to a third party tournament. Patron gets a W-2G for the value of the comp reduced by the original paid entry fee. Gaming establishments may have to gross up the W-2G for Mississippi withholding tax purposes. • Gaming establishment comps a tournament entry fee for a patron. A 1099 MISC must be issued for any payout of $600 or more. The reportable amount is not reduced by the comp’d entry fee.

35 Miss. Admin. Code Pt. 3, R. 305 (Reserved)

35.III.11.22 revised effective October 4, 2021

Chapter 23 Transfer of Assessments

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

Definitions 101 For purposes of this chapter, the term "employer" means a person doing business in, or deriving income from sources within the state, who has control of the payment of wages to an individual for services performed, or a person who is the officer or agent of the person having control of the payment of wages. “Employer” is further defined under Title 35, Part III, Subpart 11, Chapter 05 of the Miss. Admin. Code. 102 The term "person" means and includes individuals, fiduciaries, corporations, partnerships, associations, the state and its political subdivisions, and the federal government, its agencies and instrumentalities. 103 (Reserved) 200 General 201 Persons owning stock of ten percent (10%) or more of a total corporation or ten percent (10%) interest or more in a limited liability company (LLC) with thirty-five (35) or less owners, and are exercising responsibility for fiscal management at the time that the tax was withheld or required to be withheld are liable for the taxes due. 202 Exercising responsibility for fiscal management includes, but is not limited to, any one of the following activities: 1. A significant involvement in the day-to-day management of the business; 2. the authority to sign business checks or tax returns; 3. the authority to direct payment of business funds to creditors; 4. the authority to pledge business assets as collateral for loans, advances, or lines of credit for the business; 5. the authority to bind the business to contracts;

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the authority to hire or fire employees who are authorized to perform any act described in three (3) through five (5) of this paragraph; 7. acting as a high ranking officer of the corporation or LLC, including, but not limited to, President, Vice-President, Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, Chairman, Vice-Chairman, Director, Controller, Secretary and/or Treasurer; 8. ownership of more than fifty percent (50%) interest in the corporation or LLC unless an operating agreement exists at the time the tax liability is accrued specifying that the taxpayer is not responsible for fiscal management; or 9. participating in decisions regarding the purchase or sale of the business or the authority to participate in decisions regarding the purchase or sale of the business. 203 The Department must transfer the assessment from the corporation or LLC to the employer or person exercising fiscal management within thirty-six (36) months of when the liability of the corporation or LLC becomes final. A notice will be issued to the transferee, and once received the transferee will have sixty (60) days in which to appeal the transfer of assessment. The transfer is appealable on the issue of the ownership interest and fiscal management requirements only. 204 Bankruptcy of the transferee does not prevent the Department from transferring a liability.

35 Miss. Admin. Code Pt. 3, R. 205 (Reserved)

35.III.11.23 revised effective January 7, 2019

35 Miss. Admin. Code Pt. 3, R. 112 (Reserved)

Subpart 12 Franchise Tax

Chapter 01 Loans from Affiliates and Shareholders

35 Miss. Admin. Code Pt. 3, R. 100 Rule 100

Miss. Code Ann. Section 27-13-9 of the franchise tax law provides for an exclusion from the franchise tax base sums representing debts, notes, bonds and mortgages due and payable, except where notes or debts due are provided by an affiliated company as a substitute for stock or paid in capital.

35 Miss. Admin. Code Pt. 3, R. 101 Rule 101

Factors to consider when determining if loans provided by an affiliated company or stockholder are a substitute for stock or paid in capital include: 1. the corporate debt to equity ratio in comparison to the consolidated group’s debt to equity ratio if the related companies are in the same or a similar industry; 2. the corporate debt to equity ratio in comparison to the industry standard for the corporation’s industry; 3. the ability of the corporation to obtain the loan from the unrelated third party without the relationship of the affiliated company or stockholder if the affiliated company or stockholder actually obtained the funds for the loan from an unrelated third party. The

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corporation’s ability to have obtained the loan from the unrelated third party must be adequately documented; and 4. any other factors the Commissioner determines are relevant.

35 Miss. Admin. Code Pt. 3, R. 102 Rule 102

If loans by an affiliated company or stockholder are determined to be a substitute for stock or paid in capital, all or a portion of the loan shall be added back to the franchise tax base so as to achieve a debt to equity ratio that reflects an adequately capitalized corporation.

35 Miss. Admin. Code Pt. 3, R. 103 (Reserved)

35 Miss. Admin. Code Pt. 3, R. 104 (Reserved)

35.III.12.02 revised effective July 1, 2009

Part 4 Sales and Use Tax

35 Miss. Admin. Code Pt. 4, R. 100 Statutory Authority

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

Miss. Code Ann. Section 27-65-93 provides that the Commissioner may provide for the issuance of a direct pay permit to manufacturers, utilities, construction contractors, companies receiving bond financing, and other taxpayers where in those instances the Commissioner determines that a permit will facilitate and expedite the collection of tax at the proper rates.

35 Miss. Admin. Code Pt. 4, R. 102 Rule 102

Taxes levied under Miss. Code Ann. Sections 27-65-17, 27-65-18, 27-65-19 (excluding the taxes levied against telecommunications services), 27-65-23, 27-65-24, 27-65-26 and 27- 67-5 may be paid directly to the State by the holder of a direct pay permit. Taxes levied under any other Sections are not covered with the use of a direct pay permit including the contractor’s tax levied under Miss. Code Ann. Section 27-65-21.

35 Miss. Admin. Code Pt. 4, R. 103 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 200 Usage

35 Miss. Admin. Code Pt. 4, R. 201 Rule 201

The issuance of a direct pay permit transfers the liability of the tax directly to the permit holder in lieu of payment to the vendor and relieves vendors of the liability for the tax. The direct pay permit shall not be used to purchase telecommunications services exempt from tax. The tax due from these services must be remitted by the telecommunications provider due to the separate diversions for interstate and intrastate services.

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35 Miss. Admin. Code Pt. 4, R. 202 Rule 202

If the permit holder continues to remit sales tax to the vendor rather than directly to state, the permit holder will be required to contact the vendor for a credit or refund of any overpayment resulting from this practice. This will be required even if the overpayment is discovered during a sales or use tax audit where there will be an assessment of additional tax made or in cases where the Statute of Limitation has run on a portion of the overpayment.

35 Miss. Admin. Code Pt. 4, R. 203 Rule 203

Direct pay permits will be issued to qualified industries and to taxpayers eligible to receive certain sales and use tax related incentives that will be project or special purpose related. Permits issued to qualified industries will be active as long as the taxpayer maintains the use tax account to which the permit is associated or until such time as the Commissioner revokes the permit. Project and special purpose related permits will be good only for the special purpose or for the eligible time frame associated with a specific project.

35 Miss. Admin. Code Pt. 4, R. 204 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 300 Qualified Industry Permits

35 Miss. Admin. Code Pt. 4, R. 301 Rule 301

Manufacturers. The Commissioner requires all manufacturers and custom processors, with certain exceptions, to obtain a direct pay permit for purposes of accruing and paying the applicable sales and use tax due on all purchases of tangible personal property, utilities and services directly to the state in lieu of payment of the tax to the vendor. 302 Utilities. The Commissioner may also authorize or require any utility company to obtain a direct pay permit for purposes of accruing and paying the applicable sales and use tax on all purchases of tangible personal property and services directly to the state in lieu of payment of tax to the vendor. 303 Telecommunications Enterprises. The Commissioner may authorize or require any entity providing telecommunications services taxed under Miss. Code Ann. Section 27-65-19 to obtain a direct pay permit for purposes of accruing and paying the applicable sales and use tax on all purchases of tangible personal property, utilities and services directly to the state in lieu of payment of the tax to the vendor. 304 Floating Structures. The Commissioner requires the owners of casinos and other floating structures taxable under Miss. Code Ann. Section 27-65-18 to obtain a direct pay permit. The direct pay permit holder is responsible for accruing and paying the applicable sales and use tax on purchases of tangible personal property, utilities and services, as well as sales of tangible personal property that become a component of the structure or construction activities taxed under Miss. Code Ann. Section 27-65-18. This section requires that the owner furnish the permit to a seller or person performing construction activities on the floating structure. However, in those instances where a contract is issued covering both water based and land based construction activities taxed under Miss. Code Ann. Sections 27-65-18 and 27-65-21 respectively, the contractor is permitted to qualify the total contract and remit the 3½% contractor’s tax due provided that the land based construction activity is in excess of $10,000.

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35 Miss. Admin. Code Pt. 4, R. 305 Rule 305

(Reserved) 400 Project Related and Special Purpose Permits 401 Contractor. A contractor may obtain a letter granting the authority to purchase free- standing tangible personal property tax free to resell to an exempt entity in the performance of its construction project or for jobs where the contractor is purchasing manufacturing or process machinery for sale to an entity financing its project with bond proceeds or for an entity holding a valid statutory exemption. 402 Bond Proceeds Project. The Commissioner requires any entity wishing to take advantage of the sales tax exemptions provided for under Miss. Code Ann. Sections 57-10-1 et seq., 57-61-1 et. seq. and 57-71-1 et seq. to obtain a direct pay permit. The direct pay permit holder must present the permit to its vendors in order to purchase tangible personal property and services exempt from tax. This direct pay permit is applicable only for purchases made for the specified project. The direct pay permit holder must accrue and pay the applicable sales and use tax on any purchases that are not made with or reimbursed with bond proceeds. The exemption does not apply to any contractor’s tax levied under Miss. Code Ann. Section 27-65-21 or vehicles tagged for highway use. The direct pay permit for this exemption will stand rescinded when the bond money is depleted and tax will once again be due to the vendor if the applicant is not a qualified industry. 403 Motion Picture Production Companies. The Commissioner requires any entity wishing to take advantage of the reduced manufacturing rate of tax provided for under Miss. Code Ann. Section 27-65-17(e) to obtain a direct pay permit for use in purchasing equipment used in the production of a motion picture, which shall not include the production of television coverage of news and athletic events, or a film, video, television series or commercial that contains any material or performance defined in Miss. Code Ann. Section 97-29-103. The direct pay permit must be provided to vendors in order to make purchases tax exempt. The holder of the permit is responsible for accruing and paying the correct rate of tax on all purchases made which are not exempt. Any direct pay permit issued to a motion picture production company will be production specific and stand rescinded when the production is complete. 404 Growth and Prosperity (GAP) Area Exemption. The Commissioner requires any entity wishing to take advantage of the exemption from sales tax provided for under Miss. Code Ann. Section 57-80-1 et seq. to obtain a direct pay permit. The direct pay permit holder must present the permit to its vendors in order to purchase tangible personal property and services exempt from tax. The GAP exemption is for a period of 10 years; however, the sales and use tax component of a GAP exemption covers only purchases of component materials and purchases or leases of machinery and equipment used in the initial construction or expansion of the business in the GAP area. The holder of the permit is responsible for accruing and paying the correct rate of tax on all purchases made which are not exempt. The exemption does not apply to any contractor’s tax levied under Miss. Code Ann. Section 27-65-21 or vehicles tagged for highway use. The direct pay permit for this exemption will stand rescinded when the project is complete and tax will once again be due to the vendor if the applicant is not a qualified industry.

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35 Miss. Admin. Code Pt. 4, R. 405 Rule 405

National or Regional Headquarters Exemption. The Commissioner requires any entity wishing to take advantage of the exemption from sales tax provided for under Miss. Code Ann. Section 27-65-101(1)(r) to obtain a direct pay permit. The direct pay permit holder must present the permit to its vendors in order to purchase tangible personal property and services exempt from tax. The holder of the permit is responsible for accruing and paying the correct rate of tax on all purchases made which are not exempt. The exemption does not apply to any contractor’s tax levied under Miss. Code Ann. Section 27-65-21, vehicles tagged for highway use or on-going expense and supply items. The direct pay permit for this exemption will stand rescinded three (3) months after the initial startup date of the facility. 406 Broadband Technology. The Commissioner requires any telecommunications entity wishing to take advantage of the sales tax exemption or reduced rate provided for under Miss. Code Ann. Section 27-65-101(5) to obtain a direct pay permit. The direct pay permit holder must present the permit to its vendors in order to purchase qualified equipment exempt from tax. The holder of the permit is responsible for accruing and paying the correct rate of tax on all purchases made that are not exempt. 407 Major Economic Impact Project Exemption. The Commissioner requires any entity establishing or operating as a Major Economic Impact Project, as defined by Miss. Code Ann. Section 57-75-5(f), to obtain a direct pay permit. The direct pay permit holder must present the permit to its vendors in order to purchase tangible personal property and services exempt from tax. The holder of the permit is responsible for accruing and paying the correct rate of tax on all purchases made which are not exempt. The exemption does not apply to any contractor’s tax levied under Miss. Code Ann. Section 27-65-21. 408 Data/Information and Technology Intensive Enterprises Exemptions. The Commissioner requires any entity wishing to take advantage of the exemptions from sales tax provided for under Miss. Code Ann. Sections 27-65-101(1)(ff), 27-65-101(1)(gg), 27-65-101(3) and 27-65-101(4) to obtain a direct pay permit. The direct pay permit holder must present the permit to its vendors in order to purchase tangible personal property and services exempt from tax. The holder of the permit is responsible for accruing and paying the correct rate of tax on all purchases made which are not exempt. The exemption does not apply to any contractor’s tax levied under Miss. Code Ann. Section 27-65-21, vehicles tagged for highway use or on-going expense and supply items. The direct pay permit for this exemption will stand rescinded three (3) months after the initial startup date of the facility. 409 Clean Energy Business Enterprise, Aerospace Industry Enterprise, and Data Center Enterprise Exemptions. The Commissioner requires any entity wishing to take advantage of the exemptions from sales tax provided for under Miss. Code Ann. Sections 27-65- 101(1)(kk), 27-65-101(1)(ll), 27-65-101(1)(mm) and 27-65-101(1)(nn) to obtain a direct pay permit. The direct pay permit holder must present the permit to its vendors in order to purchase tangible personal property and services exempt from tax. The holder of the permit is responsible for accruing and paying the correct rate of tax on all purchases made which are not exempt. The exemption does not apply to any contractor’s tax levied under Miss. Code Ann. Section 27-65-21, vehicles tagged for highway use or on-going expense and supply items.

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35 Miss. Admin. Code Pt. 4, R. 410 Rule 410

Health Care Industry Zone Exemption. The Commissioner requires any entity wishing to take advantage of the exemptions from sales tax provided for under Miss. Code Ann. Sections 27-65-101(1)(kk) and 27-65-101(1)(mm) to obtain a direct pay permit. The direct pay permit holder must present the permit to its vendors in order to purchase tangible personal property and services exempt from tax. The holder of the permit is responsible for accruing and paying the correct rate of tax on all purchases made which are not exempt. The exemption does not apply to any contractor’s tax levied under Miss. Code Ann. Section 27-65-21, vehicles tagged for highway use or on-going expense and supply items. The direct pay permit for this exemption will stand rescinded three (3) months after the completion of the facility, addition or improvement. 411 In order to receive an exemption, the exempt items must be sold directly to, billed or invoiced directly to and paid for directly by the entity receiving the exemption. 412 If a person improperly uses a direct pay permit or letter granting the authority to make tax exempt purchases, that person may still be liable for tax that would normally have been paid to the vendor. 413 (Reserved) 500 Filing Requirements 501 Use tax returns are required to be filed based upon the filing status assigned by the Department. Any tax due on taxable purchases by the permit holder must be reported on its return. Any other sales tax liability of the permittee shall be reported under a separate account.

35 Miss. Admin. Code Pt. 4, R. 502 Rule 502

A direct pay permit is subject to revocation when the Commissioner determines that the best interest of the state will be served in so doing.

35 Miss. Admin. Code Pt. 4, R. 503 (Reserved)

35.IV.01.01 revised effective April 1, 2018.

Chapter 02 Damages for Delinquent Payment of Tax

35 Miss. Admin. Code Pt. 4, R. 100 Rule 100

The Sales Tax Law requires that monthly sales tax returns shall be filed by the twentieth of the month following the period covered, and quarterly sales tax returns shall be filed by the twentieth of the month following the end of the quarter. Persistent, willful or recurring failure to file such returns on or before the due date subjects the taxpayer to damages and interest on the amount due.

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

Any taxpayer, to whom a sixty (60) day delinquent notice has been directed or who makes a payment after the due date, will be assessed a ten percent (10%) penalty and be subject to interest when the tax is paid. This penalty is applicable in those instances where the failure to pay is due to the taxpayers’ negligence and the failure to comply is determined to be without the intent to defraud. The interest rate assessed on or after January 1, 2015, is:

Page 8 of 141

Nine-tenths of one percent (9/10 of 1%) per month for taxes assessed on or after January 1, 2015, and before January 1, 2016; 2. Eight-tenths of one percent (8/10 of 1%) per month for taxes assessed on or after January 1, 2016, and before January 1, 2017; 3. Seven-tenths of one percent (7/10 of 1%) per month for taxes assessed on or after January 1, 2017, and before January 1, 2018; 4. Six-tenths of one percent (6/10 of 1%) per month for taxes assessed on or after January 1, 2018, and before January 1, 2019; and 5. One-half of one percent (1/2 of 1%) per month for taxes assessed on or after January 1, 2019.

35 Miss. Admin. Code Pt. 4, R. 102 Rule 102

In the instance a taxpayer makes a late payment, and it is determined by the Commissioner that there is intentional disregard of the law or done with intent to defraud, there will be a fifty percent (50%) penalty assessed. This penalty will be used when the taxpayer continually pays late, when an underpayment of tax by one hundred percent (100%) or more is discovered during an audit or when an audit of taxpayer records reveals an attempt to disguise or hide taxable transactions. This penalty will not be assessed if the taxpayer can prove reasonable cause for failure to comply.

35 Miss. Admin. Code Pt. 4, R. 103 Rule 103

A penalty of three hundred percent (300%) of the tax due will be assessed if it is proved by preponderance of the evidence, from the taxpayer’s records that tax was collected and then knowingly and intentionally not remitted. The taxpayer cannot be presumed to have collected the tax. The penalty can be assessed in addition to the ten percent (10%) or the fifty percent (50%) late pay penalty.

35 Miss. Admin. Code Pt. 4, R. 104 Rule 104

The only exceptions to this procedure will be in those cases where the taxpayer makes a bond, or when the taxpayer requests, and is granted an extension of time in which to file, as provided by Section 27-65-33. When the taxpayer makes bond, returns may be filed quarterly; and if the extension is granted, returns may be filed before expiration of the extension without penalty.

35 Miss. Admin. Code Pt. 4, R. 105 Rule 105

The taxpayer discount will not be allowed on returns which are filed after the twentieth of the month following the period covered or if the return is not fully paid. The granting of extensions of time in which to file returns does not extend the period for claiming the discount. In the instance a taxpayer files and pays a timely return claiming a discount, and then subsequently files an amended return owing more tax, the discount claimed shall be added back in the amended calculation.

35 Miss. Admin. Code Pt. 4, R. 106 (Reserved)

Chapter 03 Sales Tax Bonds

35 Miss. Admin. Code Pt. 4, R. 100 Rule 100

The Sales Tax Law provides that cash or surety bonds be filed in various instances where the revenue of the State of Mississippi must be protected and the payment of taxes assured. Bonds are required in the following circumstances, however, the Commissioner does retain

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the authority to require a taxpayer to post a bond for other circumstances where the Commissioner feels it is necessary.

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

Any taxpayer operating a business from their home or from a temporary location (less than 90 day lease), shall be required to post a cash or surety bond prior to receiving a Sales Tax Permit to engage in business. The cash bond or approved surety bond shall be in an amount sufficient to cover the estimated tax liability for a six-month period. The amount of the bond shall be set by the Commissioner.

35 Miss. Admin. Code Pt. 4, R. 102 Rule 102

A temporary location includes, but is not limited to, an event held for a limited period of time that may include the issuance of a temporary beer license. Any taxpayer who can demonstrate that they operate a permanent business location in this State may be exempted from posting a bond for a temporary event.

35 Miss. Admin. Code Pt. 4, R. 103 Rule 103

Any taxpayer operating a new or used mobile home dealership shall be required to post a cash or surety bond prior to receiving a Sales Tax Permit to engage in business. The amount of the bond shall be $25,000 for a dealer of new mobile homes and $10,000 for a dealer of used mobile homes, unless the taxpayer or Commissioner can show cause for another amount to be accepted.

35 Miss. Admin. Code Pt. 4, R. 104 Rule 104

Any manufactured home dealer who files delinquent tax returns for more than one period in a calendar year or who presents a check for payment of tax that is returned by the bank for insufficient funds, shall be required to post a bond equal to six months’ tax liability. The six months’ liability shall be determined by accumulating the past 12 months’ liability (determined by returns filed or audit results) and dividing by 2.

35 Miss. Admin. Code Pt. 4, R. 105 Rule 105

Any person who fails to comply with all the provisions of the sales tax law forfeits his right to do business in this state until such time as the person shall comply with all the provisions, post an adequate surety bond as established by the Commissioner and pay all taxes legally due. A surety bond will be required for any person who: 1. Fails to obtain a sales tax permit before going into business; 2. Continues to operate a business after revocation of the sales tax permit; 3. Fails to file their sales tax returns; 4. Fails to keep adequate records and invoices as required by the sales tax laws; 5. Fails or refuses to permit inspection of records; or 6. Fails to pay any taxes due under the sales tax laws. The surety bond shall be in an amount sufficient to cover the estimated tax liability for a six months' period and conditioned that all taxes accruing in the future will be paid when due.

35 Miss. Admin. Code Pt. 4, R. 106 Rule 106

A taxpayer petitioning for a hearing prior to sale of property which has been seized under a jeopardy warrant must execute a supersedeas surety bond with a surety company doing business in this state for double the amount of the assessment. The bond must be conditioned that any taxes, damages, interest and costs adjudged to be due after the hearing will be paid promptly upon order of the Department of Revenue.

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35 Miss. Admin. Code Pt. 4, R. 107 Rule 107

Contractors performing contracts in excess of $75,000 must post a bond, prior to beginning construction, on any taxable contracts performed in this State unless the tax is prepaid. The bonds shall be either a job bond which guarantees payment when due of the taxes resulting from performance of a specified job or activity regardless of date of completion or a blanket bond which guarantees payment when due of the taxes resulting from performance of all jobs or activities taxable under Miss. Code Ann. Section 27-65-21 begun during the time period covered by the bond regardless of the date of completion of the job. The bond must be sufficient to cover the liability for sales, use, income, withholding and motor fuel taxes. The bond must be approved by the Commissioner. When a bond is filed, the sales tax due under Miss. Code Ann. Section 27-65-21 must be paid on a monthly basis as compensation is received.

35 Miss. Admin. Code Pt. 4, R. 108 Rule 108

The surety on the tax bond is secondarily liable for all taxes due on the contract covered by the bond. When a contractor defaults on the execution of his contract and the bonding company acting as surety for the performance of the contract assumes completion of the contract, the bonding company becomes primarily liable for the payment of the sales, use, income, withholding and motor fuel taxes accruing as a result of its activities and is subject to the same bonding requirements and MPC (material purchase certificate) requirements as the original contractor.

35 Miss. Admin. Code Pt. 4, R. 109 (Reserved)

35.IV.01.03 revised effective July 1, 2018

Chapter 04 Reserved

35.IV.1.04 updated effective September 1, 2018

Chapter 05 Taxpayer Discount

35 Miss. Admin. Code Pt. 4, R. 100 Rule 100

Taxpayers must file a single sales tax return which includes all individual permit locations. Taxpayers should file a consolidated use tax return.

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

For prompt filing and payment of all taxes due, certain taxpayers are allowed a 2% discount of the tax liability subject to the following limitations: 1. It shall not exceed $50.00 per calendar reporting period (monthly, quarterly, or annually), per permit location on each sales tax return and on each use tax return. 2. Total shall not exceed $600.00 per permit location per calendar year. 3. The discount is not available to: a. Contractors b. County or State agencies serving as collectors of sales or use tax c. Public utilities d. Wholesalers collecting the wholesale rates of tax which are equal to or greater than the tax rate applicable to retail sales of the same property or service. e. Any person failing to file by the 20 th day following the reporting period. The granting of extensions of time does not extend the period for claiming the discount.

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An authorized extension avoids imposition of penalty and interest on returns filed by the extended due date, but the discount is confined by Statute to returns filed within twenty (20) days after the reporting period only. f. Any person found deficient in the payment of his liability for any period. When a deficiency assessment amounts only to a very small percentage of the total tax paid, approval may be given to allow the discount.

35 Miss. Admin. Code Pt. 4, R. 102 (Reserved)

Chapter 06 Definitions

35 Miss. Admin. Code Pt. 4, R. 100 Rule 100

Credit for tax paid to another state – An individual, who imports property into Mississippi, is entitled to a tax credit for taxes paid to another state at either the state or local level or both. The tax credit is the smaller of either the amount of Mississippi use tax due or the total amount of tax properly paid in another state. For sales tax to be properly paid to another state, the situs of the sale must be that state, and for use tax to be properly paid, first use must occur in that state. Also, any sales or use tax claimed as a credit must have been levied by a state or local taxing authority. The individual must provide an invoice or other evidence that clearly and correctly shows the amount of tax as a separate item to support the credit for taxes paid to another state.

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

Value – For sales tax purposes, the term “value” as used in Miss. Code Ann. Section 27- 65-3(h) means the entire cost of goods, wares, merchandise or property that is withdrawn from the inventory or stock of a business for use, either personal use or for use in the performance of a job or service. The entire cost includes the cost of materials, labor, overhead or any other similar costs that are incurred in delivering the property to the point of use and which would otherwise contribute to the sales price of such property if it were not converted to use.

35 Miss. Admin. Code Pt. 4, R. 102 Rule 102

Value – For use tax purposes, the term “value” as used in Miss. Code Ann. Section 27-67- 3(h) means the estimated or assessed monetary worth of a thing or property. The value of property transferred into this state for sales promotion or advertising shall not be less than the cost paid by the person who transfers the property or who donates the property. The value of property that is brought into this state when the property has been used in another state is determined by its cost less straight line depreciation; however, the value cannot be less than twenty percent (20%) of the cost. Any other method of determining value may be used when such method is acceptable to the Commissioner. The value of property imported by the manufacturer of such property for rental or lease in this state is the manufactured cost of the property.

35 Miss. Admin. Code Pt. 4, R. 103 Rule 103

Person – For sales tax purposes, the term “person” shall mean any individual, firm, copartnership, joint venture, association, corporation, promoter of a temporary event, estate, trust or other group or combination acting as a unit, and includes the plural as well as the singular in number. “Person” shall also include husband or wife, or both, where they may jointly benefit from the operation of a business that is subject to sales tax. “Person” shall also include any state, county, municipality or other political subdivision and any

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agency, institution or instrumentality thereof engaging in a business that is subject to sales tax.

35 Miss. Admin. Code Pt. 4, R. 104 Rule 104

Person – For use tax purposes, the term “person” shall mean any individual, firm, partnership, joint venture, association, corporation, estate, trust, receiver, syndicate or any other group or combination acting as a unit and includes the plural as well as the singular in number. “Person” shall also include husband or wife, or both, where joint benefits are derived from the operation of a business that is subject to use tax or where joint benefits are derived from the use of property that is subject to use tax.

35 Miss. Admin. Code Pt. 4, R. 105 (Reserved)

35.IV.01.06 revised effective September 1, 2018.

Chapter 07 Sales and Use Tax - Returns, Amended Returns, Credits and Refunds

35 Miss. Admin. Code Pt. 4, R. 100 General

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

Miss. Code Ann. Sections 27-65-33 and 27-67-17 require taxpayers to file a return on the twentieth day of each month with the amount of tax due by such taxpayer for the preceding calendar month. The Commissioner of Revenue may permit filing periods of a different duration.

35 Miss. Admin. Code Pt. 4, R. 102 Rule 102

All returns must be sworn to by the taxpayer to be a true, correct and complete return as required by Miss. Code Ann. Section 27-65-33(3).

35 Miss. Admin. Code Pt. 4, R. 103 Rule 103

If the taxpayer fails to timely file a return, the Commissioner shall issue an assessment estimating the amount of tax due as required under Miss. Code Ann. Section 27-65-35.

35 Miss. Admin. Code Pt. 4, R. 104 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 200 Requesting an Examination of a Return or Returns

35 Miss. Admin. Code Pt. 4, R. 201 Rule 201

If a taxpayer determines that the amount of tax due on a previously filed return is incorrect, the taxpayer may request an examination of such by filing an amended return.

35 Miss. Admin. Code Pt. 4, R. 202 Rule 202

Amended returns must be sworn to by the taxpayer to be a true, correct and complete return as required by Miss. Code Ann. Section 27-65-33(3). Single adjustment or transaction requests will not be granted. The taxpayer must attest to the accuracy of the entire tax amount for the period. An adjustment to a customer’s invoice reported on a prior period within statute can be included in the period the adjustment was made.

35 Miss. Admin. Code Pt. 4, R. 203 Rule 203

Miss. Code Ann. Section 27-65-42 provides thirty-six (36) months for the Commissioner to determine and assess the amount of taxes due on any return which has been filed. Any amended return which is filed is also subject to audit and assessment in the same manner.

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35 Miss. Admin. Code Pt. 4, R. 204 Rule 204

Amended returns resulting in an increase in the taxpayer’s liability will result in the loss of the discount previously allowed under Miss. Code Ann. Section 27-65-33. The additional amount due will be subject to applicable penalty and interest.

35 Miss. Admin. Code Pt. 4, R. 205 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 300 Authorized Tax Credits or Refunds

35 Miss. Admin. Code Pt. 4, R. 301 Rule 301

Tax Credits or Refunds will only be granted to the taxpayer having paid the tax to the State of Mississippi.

35 Miss. Admin. Code Pt. 4, R. 302 Rule 302

Tax collected by a vendor cannot be refunded by the Department directly to the customer of the vendor. Retail customers believing they were charged the incorrect tax should contact the vendor to pursue any available refund.

35 Miss. Admin. Code Pt. 4, R. 303 Rule 303

If the overpayment can be used within a twelve (12) month period, the Department will allow a credit to be used against the account for future periods as authorized in Miss. Code Ann. Section 27-65-53. Refund claims for an overpayment that cannot be used within a twelve (12) month period will be granted. The determination as to whether the credit can be used within a twelve (12) month period will be based on the amount of tax paid on the account within the twelve (12) months preceding the date the amended return reflecting the claim for overpayment received.

35 Miss. Admin. Code Pt. 4, R. 304 Rule 304

If the taxpayer wants a refund in lieu of a credit on the account, the taxpayer should send a written request that states, in detail, the basis for the refund request after filing amended returns.

35 Miss. Admin. Code Pt. 4, R. 305 Rule 305

The Department, at its discretion, may still issue a refund as requested in the taxpayer’s claim under extenuating circumstances when the credit of the overpayment can be used within a twelve (12) month period. The determination to not issue a refund on an account where a credit can be used within a twelve (12) month period is not subject to appeal under Miss. Code Ann. Section 27-77-5 so long as the credit was issued in the amount requested.

35 Miss. Admin. Code Pt. 4, R. 306 (Reserved)

Chapter 08 Liability When Selling a Business and Transfer of Assessments 100 For purposes of this chapter, the term, “person”, is defined in Miss. Code Ann. Section 27- 65-3(c). Note that the definition of a “person” includes a spouse when joint benefits are derived from the operation of the business. 101 A lien is attached to any property of a person having a sales tax liability who closes or sells a business, which includes selling off the inventory of the business. A return is required to be filed within ten (10) days after the date the business is closed, or sold, or the inventory is sold and any sales tax liability due must be paid. 102 A purchaser of a business is required to withhold an amount not to exceed the purchase price assuming the purchase is at arm’s length. If the purchase is not an arm’s length

35 Miss. Admin. Code Pt. 4, R. 100 Rule 100

When a person engaged in the business of selling any property or services taxable under the Sales Tax Law sells to his employees or others at discount prices for reason of accommodation, such sales are taxable retail sales.

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

A sale of property which is delivered to and for which collection is made from a person that will consume or use the property rather than resell it, is a retail sales taxable to the person making delivery even though the billing is to another dealer.

35 Miss. Admin. Code Pt. 4, R. 102 (Reserved)

Chapter 02 Prizes, Premiums, Gifts, Coupons, Rebates, Discounts, Buy Downs, and Trading Stamps

35 Miss. Admin. Code Pt. 4, R. 100 Statutory Authority

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

Miss. Code Ann. Section 27-65-3(h) defines gross proceeds of sales to include amounts received by the seller from a third party if: 1. The seller actually receives consideration from someone other than the purchaser and the consideration is directly related to a price reduction or discount on the sale; 2. The seller is required to pass the price reduction or discount on to the purchaser; 3. The amount of the consideration that is attributable to the sale is fixed and determinable by the seller at the time of the sale; and 4. One of the following criteria is met: a. The purchaser presents a coupon, certificate or other documentation to the seller to claim the price reduction or discount and the coupon, certificate or other documentation is authorized, distributed or granted by a third party and the third party will reimburse the seller; b. The purchaser identifies himself or herself as a member of a group or organization entitled to a price reduction or discount (a preferred customer card available to any patron does not constitute membership in such a group); or c. The price reduction or discount is identified as a third party price reduction or discount on the invoices or receipt received by the purchaser or on a coupon, certificate of other documentation presented by the purchaser.

35 Miss. Admin. Code Pt. 4, R. 102 Rule 102

Miss. Code Ann. Section 27-65-3 provides that gross proceeds of sales also includes the value of property purchased at wholesale that is withdrawn or used by the business for use in the business or for any other purpose by the business or owner(s).

35 Miss. Admin. Code Pt. 4, R. 103 Rule 103

Miss. Code Ann. Section 27-67-5 levies a use tax on the use, storage or consumption of tangible personal property in this state.

35 Miss. Admin. Code Pt. 4, R. 104 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 200 Prizes, Gifts, or Premiums

Page 16 of 141

35 Miss. Admin. Code Pt. 4, R. 201 Rule 201

Persons purchasing property or withdrawing property from inventory to be given away, awarded as prizes in games and contests of chance or skill or distributed for advertising purposes are regarded as the user or consumer of the property and the regular retail sales or use tax applies.

35 Miss. Admin. Code Pt. 4, R. 202 Rule 202

The purchase price of goods ordinarily bought for resale but subsequently given away or used must be included in the gross sales of the purchaser and the regular retail tax paid. The value of a gift received from an out-of-state donor is subject to use tax.

35 Miss. Admin. Code Pt. 4, R. 203 Rule 203

When a person sells tangible personal property and simultaneously includes other tangible personal property as a premium or gift to the purchaser as a part of the same transaction, the selling price is deemed to include all items to which title passes as the time of sale.

35 Miss. Admin. Code Pt. 4, R. 204 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 300 Coupons, Rebates, Discounts, and Buy-Downs

35 Miss. Admin. Code Pt. 4, R. 301 Rule 301

Coupons that may be used at any store location and that are reimbursed by the manufacturer of the merchandise are called manufacturer’s coupons. Merchandise purchased in whole or in part by manufacturer’s coupons is taxable on the full selling price because the amount of the discount is known, the purchaser has taken an affirmative action to claim the discount and the seller will be reimbursed by the manufacturer for the amount of the coupon. Price reductions given through the use of seller’s loyalty cards or preferred customer discount cards are treated as manufacturer’s coupon when the discount is identified on the cash register tape as a manufacturer’s discount and the seller is reimbursed by a third party.

35 Miss. Admin. Code Pt. 4, R. 302 Rule 302

Coupons that can be used only at a particular seller, store or chain of stores are called store coupons. Merchandise purchased in whole or in part by store coupons is taxable on the selling price less any discount allowed for the coupon because the seller is not reimbursed by any third party for the amount of discount. Price reductions given through the use of seller’s loyalty cards or preferred customer discount cards are treated as store coupons when the seller does not receive any reimbursement from a third party.

35 Miss. Admin. Code Pt. 4, R. 303 Rule 303

A rebate given by the seller is considered to be a discount deductible from the selling price when shown on the invoice and is exempt because the seller is not reimbursed by any third party for the amount of the rebate.

35 Miss. Admin. Code Pt. 4, R. 304 Rule 304

A rebate made directly by the manufacturer to the purchaser or to the seller, or assigned to the seller by the purchaser is taxable as a segment of the selling price because the amount of the rebate is known at the time of the sale, the rebate is identified as a manufacturer’s rebate on documentation received by the purchaser and the rebate is directly related to the sale.

35 Miss. Admin. Code Pt. 4, R. 305 Rule 305

Any discount offered by a seller to all members of a particular group are taxable when the seller receives a reimbursement from a third party and the members of the group are required to identify themselves as a member of the group eligible for a discount.

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35 Miss. Admin. Code Pt. 4, R. 306 Rule 306

Buy down programs are those programs where a manufacturer enters into an agreement with a seller to provide the seller with a discount for each qualifying sale or purchase of a particular product. The retailer passes the discount through to the customer. The buy down received by the seller is not taxable unless the customer presents some type of documentation to the seller to claim the discount or the discount is identified as a third party discount on the invoice received by the purchaser.

35 Miss. Admin. Code Pt. 4, R. 307 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 400 Trading Stamps

35 Miss. Admin. Code Pt. 4, R. 401 Rule 401

The transfer of property through the exchange or redemption of coupons, trading stamps or other thing of value is a transaction in which title of property passes and constitutes a taxable sale. The regular retail rate of tax applies to the stated value of the stamps or coupons or the retail value of the merchandise received, whichever is greater, regardless of whether redeemed by the store originally issuing the stamps or by a merchandise redemption center.

35 Miss. Admin. Code Pt. 4, R. 402 Rule 402

Trading stamp firms maintaining a redemption store in Mississippi are not liable for sales tax on the cost of merchandise for resale. Trading stamp firms distributing or selling trading stamp programs in this State are liable for the regular retail rate of sales or use tax on the cost of stamps, stamp books, catalogues, signs, stamp trays, and other supplies for use in this State.

35 Miss. Admin. Code Pt. 4, R. 403 Rule 403

Trading stamps redeemed at points outside this State are subject to use tax, and if the tax is not collected and paid by the out-of-state redeemer, it accrues to the person in this State receiving the property.

35 Miss. Admin. Code Pt. 4, R. 404 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 500 Prepaid Discount Voucher Programs

35 Miss. Admin. Code Pt. 4, R. 501 Rule 501

Prepaid discount voucher programs are programs in which merchants advertise promotional deals and discounts through a third-party, online marketing agent, such as Groupon and Living Social. The promotional deals or discounts are offered as a voucher that the customer purchases for a percentage, usually fifty percent (50%) or less, of its face value or the value of the goods or services that may be redeemed with the voucher. The customer can use the voucher like a gift card toward the purchase of goods or services from the merchant. No tax is due on the sale of the voucher. The tax at the regular retail rate must be collected by the merchant for the full sale price of the goods or services, including the amount covered by the voucher, or on the amount that would normally be charged for goods or services redeemed with the voucher.

35 Miss. Admin. Code Pt. 4, R. 502 Reserved

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35.IV.2.02 revised effective December 1, 2018

Chapter 03 Mileage, Delivery Charges and Rebilled Expenses

35 Miss. Admin. Code Pt. 4, R. 100 Rule 100

Income received from travel, mileage or delivery charges must be included in gross proceeds of sales or gross income when incurred in connection with the sale of tangible personal property or in the performance of taxable services by vendors doing business within this state. This includes any charges made by the seller for delivery of property sold to the purchaser even though such amounts are separately stated on the seller's invoice apart from the sales price of the property.

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

Purchases from or sales by out-of-state vendors of tangible personal property are subject to use tax on the full purchase price to the point of use within this state.

35 Miss. Admin. Code Pt. 4, R. 102 Rule 102

Any business which performs a delivery service or which incurs travel expenses recovers this expense through the charge for its goods or services. Separately invoicing the customer with charges representing a recovery of these expenses is in reality an allocation of the selling price to this cost of operation and cannot be excluded from the measure of tax imposed.

35 Miss. Admin. Code Pt. 4, R. 103 Rule 103

Hotel expenses, meals, supplies, freight and other expenses which are itemized by the seller and rebilled to the customer must be included in gross proceeds of sales or gross income even though separately billed and irrespective of the fact that such goods and services may have borne a retail tax.

35 Miss. Admin. Code Pt. 4, R. 104 (Reserved)

35.IV.2.03 revised effective August 3, 2026

Chapter 04 Finance Charges and Bad Debts

35 Miss. Admin. Code Pt. 4, R. 100 Finance Charges

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

Sales tax is levied on the gross proceeds of sales or gross income as the case may be, excluding charges on account of deferred payment by the purchaser, such as finance charges and late payment penalties

35 Miss. Admin. Code Pt. 4, R. 102 Rule 102

Bad check charges as provided for in Miss. Code Ann. Section 97-19-57 are also to be excluded from the gross proceeds of sales or gross income as the case may be. 103 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 200 Bad Debts

35 Miss. Admin. Code Pt. 4, R. 201 Rule 201

Miss. Code Ann. Section 27-65-33 provides that any taxpayer reporting credit sales and

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paying the sales tax on such sales may take a credit on any subsequent return for bad debts actually charged off as uncollectible accounts. A taxpayer may not be allowed credit or refund for the sales tax associated with the uncollectible portion of a credit sale unless the taxpayer remitted the tax on the initial sales and also extended the credit used to finance the sale.

35 Miss. Admin. Code Pt. 4, R. 202 Rule 202

If any amount that has been written off as bad debt and has been taken as a credit on a return is subsequently collected, the tax due on the collected amount must be paid on the next return filed.

35 Miss. Admin. Code Pt. 4, R. 203 Rule 203

When credit is extended by a third party or when the credit instrument or account receivable is sold to a third party, neither the third party nor the retailer is eligible for a refund of sales tax associated with any bad debt charged off for uncollectible accounts. 204 (Reserved)

Sub Part 03 Taxability

Chapter 01 Wholesale Sales

35 Miss. Admin. Code Pt. 4, R. 100 Rule 100

Wholesale sales are sales of tangible personal property from a wholesaler, jobber or distributor, known to the trade as such, to licensed retail merchants, jobbers, dealers, or other wholesalers for resale. It does not include sales to users or consumers that are not for resale.

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

“Wholesale sales” shall include: 1. a. A sale of tangible personal property taxable under Section 27-65-17 for resale in the regular line of business, when made in good faith to a retailer regularly selling or renting that property and when said dealer is licensed under Section 27-65-27 if located in this State. b. A sale of a service taxable under Section 27-65-23 for resale in the regular line of business, when made to a regular dealer in that service and when said dealer is licensed under Section 27-65-27 if located in this State, or a charge for custom processing rendered upon merchandise for resale or rental by a dealer licensed under Section 27-65-27. c. A sale of telecommunications services taxable under Section 27-65-19 for resale in the regular course of business, when made to a regular telecommunications provider of the service and the provider is the holder of a permit issued under Section 27-65-27 and is located in this state or is providing telecommunications services in this state. d. A sale of specified digital product taxable under Section 27-65-26 for resale in the regular course of business, when made to a regular dealer of specified digital products and the dealer is the holder of a permit issued under Section 27- 65-27 and is located in this state. 2. A sale of tangible personal property or service which is to become a component part of a structure or improvement erected, constructed, repaired, or made only

Page 20 of 141

when such sale is made to a contractor taxable under Section 27-65-21 on the contract in which the component materials are to be used; and only when the contractor holds a Material Purchase Certificate as required by Section 27-65-21. 3. A sale of boxes, crates, cartons, cans, bottles and other packaging materials to a retailer or retail custom processor for use as a container to accompany goods or services sold by said retailer or custom processor where possession thereof will pass to the customer at the time of sale of the goods or services contained therein. 4. The value of soft drinks and syrup withdrawn from the business by a manufacturer for sale at retail and food or drink withdrawn by a manufacturer or wholesaler to be sold through full-service vending machines for human consumption.

35 Miss. Admin. Code Pt. 4, R. 102 Rule 102

"Wholesale sales" shall not include a transaction whereby property is delivered to and collection for same is made from a person that will consume the property rather than resell it even though the billing is to a retailer. Provided, however, when a taxpayer sells merchandise and has paid a rate equal to the retail rate of tax on the purchase price to a wholesaler, the taxpayer may take credit for the tax paid to the wholesaler from the tax due on the sale of the merchandise specifically included in his return to the Commissioner.

35 Miss. Admin. Code Pt. 4, R. 103 Rule 103

Items that were purchased at wholesale but are withdrawn from inventory for use of the business are subject to sales tax. This includes any items that are purchased tax free for resale but are withdrawn from inventory and used by the owner, employees, or any other person instead of being sold.

35 Miss. Admin. Code Pt. 4, R. 104 Rule 104

Wholesale sales of medical cannabis may only be made to licensed medical cannabis cultivators, medical cannabis processors, or medical cannabis dispensaries. The purchaser must provide their sales tax number and ten-digit license number as documentation of a valid wholesale sale.

35 Miss. Admin. Code Pt. 4, R. 105 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 200 Rule 200

Tax on Certain Wholesale Sales: 1. Food and drink for human consumption is taxed at the 8% wholesale rate of tax when the operator of a full-service vending machine places the merchandise in the machine for sale (see Title 35, Mississippi Administrative Code, Part IV, Subpart 4, Chapter 3.). All other sales at wholesale are exempt from sales or use tax. 2. The wholesale tax is not subject to the 2% taxpayer discount and shall not be included in the amount on which the discount is taken.

35 Miss. Admin. Code Pt. 4, R. 201 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 300 Rule 300

Document Retention to Substantiate Wholesale Sales: 1. The quantity of property or services sold or the price at which they are sold is immaterial in determining whether a sale is at wholesale. Sales may be classed as wholesale, or exempt, only if evidenced by proper and adequate records and invoices to substantiate the exemption from the tax on each individual sale.

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The substantiation of wholesale or exempt sales must be by an invoice clearly indicating the date, the name and address of the vendor and vendee, the items sold and the price. Vendors making wholesale sales to customers who are issued a permit under Miss. Code Ann. Section 27-65-27 or have a letter ruling indicating an exemption must maintain a copy of the permit or letter ruling for these customers. Such proof of wholesale or exempt sales shall be filed in chronological order and preserved for a period of three (3) years from the date of sale. These records shall be subject to inspection by the Commissioner and his agents, at their discretion, for the verification of returns filed by either the wholesaler or his customers. This requirement shall apply equally to a retailer making wholesale or exempt sales. Please see Title 35, Mississippi Administrative Code, Part I, Chapter 02, Taxpayer Records and Document Retention for general document retention requirements imposed on all taxpayers. 3. Any failure to comply with all the above requirements shall subject the violator to the retail rate of tax on all such violations. 4. Wholesalers and distributors of light wines, light spirit products or beer are further required to file detailed monthly reports of all sales of such light wines, light spirit products or beer with the Commissioner.

35 Miss. Admin. Code Pt. 4, R. 301 (Reserved)

35.IV.03.01 Revised effective December 7, 2023

Chapter 02 Isolated, Casual or Occasional Sales

35 Miss. Admin. Code Pt. 4, R. 100 Sales Tax

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

Isolated or occasional sales, except sales of motor vehicles, made by persons not regularly engaged in business are not subject to sales tax. No sale, except a sale of a motor vehicle, is taxable under the Sales Tax Law if it is not made in the regular course of the business of a person selling tangible personal property.

35 Miss. Admin. Code Pt. 4, R. 102 Rule 102

"Motor vehicle" means a motor vehicle required to be registered or licensed by County Tax Collectors pursuant to Miss. Code Ann. Section 27-19-43. This includes private carriers of passengers, school buses, church buses, taxicabs, ambulances, hearses, motorcycles, private carriers of property, and private commercial carriers of property and drays of a gross weight of 10,000 pounds or less.

35 Miss. Admin. Code Pt. 4, R. 103 Rule 103

Transfers of motor vehicles from any person, firm, or corporation not considered to be a licensed dealer to any person, firm, or corporation is subject to a five percent (5%) casual sales tax based on the true value of the motor vehicle as calculated by the official motor vehicle assessment schedule provided by the Department pursuant to Miss. Code Ann. Section 27-65-201. The tax due on such sales or transfers are to be paid by the purchaser(s) to the County Tax Collector at the time the motor vehicle is registered or licensed.

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35 Miss. Admin. Code Pt. 4, R. 104 Rule 104

Transfers of motor vehicles are not subject to the casual sales tax if the transfer is: 1. Between a husband and wife; a parent and child; a grandparent and grandchildren; or siblings, 2. Pursuant to a will or any law providing for the distribution of the property of any person having died without a legal will, 3. Pertaining to a motor vehicle that is ten (10) or more years old based on the date of the vehicle’s manufacture, 4. Between a trustee and a beneficiary of the trust as evidenced by a completed Affidavit of Motor Vehicle Title Transfer, 5. Between a corporation and one (1) of its shareholders in a transaction that qualifies for nonrecognition of gain or loss in accordance with Section 351 of the IRS Code, as evidenced by a completed Affidavit of Motor Vehicle Title Transfer, or 6. Between a partnership or limited liability company and one (1) of its partners or owners, as evidenced by a completed Affidavit of Motor Vehicle Title Transfer.

Using a licensed dealer in the transfer of a motor vehicle will void the tax exemptions listed above; the licensed dealer will be responsible for collecting and remitting the applicable sales tax.

35 Miss. Admin. Code Pt. 4, R. 105 Rule 105

All sales made by officers of a court, pursuant to court orders, are occasional sales, except for sales made by trustees, receivers, assignees, and the like in connection with the liquidation or conduct of a regularly established place of business. Examples of casual sales are those made by sheriffs in foreclosure proceedings, sales of confiscated property, and sales of tangible personal property, such as used equipment when the sale represents the disposal of capital assets that the seller does not offer for sale in his regular course of business. Example: Anyone selling his old boat rather than trading it in on a new one.

35 Miss. Admin. Code Pt. 4, R. 106 Rule 106

The bulk sale of an inventory of merchandise to a dealer is exempt from sales tax. This exemption does not include the liquidation of a business when the inventory is sold to the general public at sale or auction.

35 Miss. Admin. Code Pt. 4, R. 107 Rule 107

Mobile homes, vehicles (except motor vehicles as defined above) or other personal property repossessed by a bank or finance company and resold through the dealer who made the original sale will be regarded as a casual sale and will not be subject to sales tax. All other sales of repossessed property are subject to sales tax.

35 Miss. Admin. Code Pt. 4, R. 108 Rule 108

Sales of personal property (except for motor vehicles as defined above) through auctions, flea markets, antiques malls, or other similar establishments, are not classified as isolated, casual, or occasional sales.

35 Miss. Admin. Code Pt. 4, R. 109 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 200 Use Tax

35 Miss. Admin. Code Pt. 4, R. 201 Rule 201

Use tax will not be applicable to non-business personal property acquired outside of this State under conditions where a similar acquisition in this State would not be subject to sales

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tax. Business property acquired in any manner and imported into this State for use in a business is subject to use tax, with proper credit allowed for another state's tax.

35 Miss. Admin. Code Pt. 4, R. 202 (Reserved)

35.IV.03.02 revised effective August 23, 2024.

Chapter 03 Leased Departments

35 Miss. Admin. Code Pt. 4, R. 100 Rule 100

When an established business leases a portion of its shelves, counters or floor space to another business or person selling tangible personal property or performing taxable services, the sales made by the leased departments or the gross income received shall be reported and paid by the lessor. A lessor not otherwise subject to the tax shall obtain a license on behalf of the lessee.

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

When the lessee conducts the leased department in the same manner as a similar established business and gives evidence to the public of conducting the department separately from the lessor’s business, the lessee may apply for a sales tax license and file sales tax returns, provided separate records of the business are maintained. The lessor shall be secondarily liable for the tax in instances where the lessee does not fulfill his tax obligations under such license.

35 Miss. Admin. Code Pt. 4, R. 102 Use tax shall be reported and paid to the State by the lessee

35 Miss. Admin. Code Pt. 4, R. 103 Rule 103

The word “lease” used in this rule includes permitted occupancy regardless of consideration.

35 Miss. Admin. Code Pt. 4, R. 104 (Reserved)

35.IV.3.03 revised effective January 15, 2019

Chapter 04 (Reserved)

35.IV.03.04 revised effective May 1, 2019.

Chapter 05 Interstate Commerce, Sales In

35 Miss. Admin. Code Pt. 4, R. 100 Sales delivered outside this state

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

All sales made and taxable services performed from a business location within the state or by a Mississippi dealer are presumed to be taxable Mississippi sales unless and until the dealer can substantiate an authorized claim for exemption. In the case of exemption by reason of delivery of the goods outside the state to an out-of-state customer, the dealer is required to establish that such delivery did, in fact, take place and that such delivery was a condition precedent to consummation of the sale.

Page 24 of 141

35 Miss. Admin. Code Pt. 4, R. 102 Rule 102

Sales and taxable repairs of tangible personal property are exempt from the Mississippi sales tax levy when: 1. The seller is required by the sales agreement to physically deliver the goods sold in the vendor's equipment from a point in this state to a point outside this state, not to be returned to a point within this state, and provided that such delivery is actually made, or 2. The seller is required by the sales agreement to deliver the goods to a common carrier or to the United States Post Office for transportation outside the state at the seller's direction, or 3. The seller is required by the sales agreement to deliver the goods outside the state by use of an independent trucker.

35 Miss. Admin. Code Pt. 4, R. 103 Rule 103

For purposes of this Chapter, neither the purchaser nor the seller is considered a common carrier even though they may operate as one commercially.

35 Miss. Admin. Code Pt. 4, R. 104 Rule 104

When tangible personal property is purchased in Mississippi for resale in another state by a dealer regularly engaged in selling such property and such dealer holds a valid sales tax permit or its equivalent for that state, the sale is exempt from tax.

35 Miss. Admin. Code Pt. 4, R. 105 Rule 105

Sales of automobiles, trucks, truck-tractors, semi-trailers, trailers, boats, motorhomes (R.V.), travel trailers, motorcycles and all-terrain cycles which are exported from this state within forty-eight (48) hours and registered and first used in another state are exempt from sales tax under Miss. Code Ann. Sections 27-65-101(1)(s) and 27-65-111(i). A properly executed Certificate of Interstate Sale must be maintained to substantiate sales of boats, all-terrain cycles or other equipment not required to be registered for highway use. A golf cart, regardless of whether it receives aftermarket modifications, is not considered an all- terrain vehicle. If the Certificate of Origin identifies the vehicle as a golf cart, it remains a golf cart for tax purposes and would be taxable at the seven percent (7%) regular rate of tax at the time of purchase, and would not be eligible for the forty-eight (48) hours exemption.

35 Miss. Admin. Code Pt. 4, R. 106 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 200 Sales delivered into this state

35 Miss. Admin. Code Pt. 4, R. 201 Rule 201

Persons operating a place of business in this state as well as one or more places of business outside this state are liable for sales tax on all sales made by or delivered from the Mississippi business and are liable for collection of use tax on all sales delivered in Mississippi by or from their out-of-state businesses.

35 Miss. Admin. Code Pt. 4, R. 202 Rule 202

Persons who do not maintain a place of business in Mississippi but who are represented in this state by salesmen who solicit or accept orders for merchandise which is subsequently delivered in this state are liable for collection of Mississippi use tax.

35 Miss. Admin. Code Pt. 4, R. 203 Rule 203

Merchandise shipped from a point of origin in Mississippi which passes through another state before reaching a point of destination in Mississippi is not considered as a sale made

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through channels of interstate commerce and the receipts from the property sold are taxable.

35 Miss. Admin. Code Pt. 4, R. 204 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 300 Drop shipment sales into this state

35 Miss. Admin. Code Pt. 4, R. 301 Rule 301

A drop shipment of merchandise is a shipment from a seller directly to the retailer’s Mississippi customer, at the direction of the retailer. Generally, a retailer accepts an order from an end customer, places this order with a third party seller, usually a manufacturer or wholesale distributor, and directs the third party to ship the goods directly to the end customer. This sequence of events results in two transactions: a) the sale by the primary seller (i.e. distributor) to the retailer and b) the sale from the retailer to the retailer’s Mississippi customer.

35 Miss. Admin. Code Pt. 4, R. 302 Rule 302

If the retailer has a valid Mississippi sales tax permit, then the retailer should furnish a copy of the permit to the primary seller, rendering the first sale a non-taxable transaction. The retailer then collects sales tax on behalf of the state on the sale to its Mississippi customer.

35 Miss. Admin. Code Pt. 4, R. 303 Rule 303

If the retailer is not registered to do business in Mississippi and the primary seller has nexus with Mississippi the sale to the retailer is a taxable transaction by the primary seller who is responsible for remitting the tax. An exception occurs when one of the following conditions are met: 1. The Mississippi customer is a licensed dealer purchasing the property for resale through his regular course of business. The primary seller can obtain a copy of the Mississippi customer’s sales tax permit and the resale exemption may flow through the retailer to the seller. 2. The Mississippi customer has a Direct Pay Permit. The Direct Pay Permit authorization may flow through the retailer to the seller. 3. The Mississippi customer is an exempt entity under the provision of the Mississippi Sales Tax Law. The Mississippi customer must furnish proof of exempt status to the seller. If proof of such exemption is not furnished, the sale is taxable.

35 Miss. Admin. Code Pt. 4, R. 304 (Reserved)

35.IV.03.05 revised effective December 1, 2019.

Chapter 06 Governmental Exemptions

35 Miss. Admin. Code Pt. 4, R. 100 General

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

Sales of tangible property, charges for labor or services are exempt when sold to, billed to and paid for by the United States Government or the State of Mississippi, its departments and institutions, counties and municipalities or departments or school districts of said counties and municipalities, or Acts of Congress or Acts of the Mississippi Legislature. The governmental exemption does not apply to states other than the State of Mississippi

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and requires that goods or services are sold directly to, billed directly to and paid for directly by the exempt governmental entity.

35 Miss. Admin. Code Pt. 4, R. 102 Rule 102

Any state department, county or municipality, or any political division or subdivision thereof, or agency, institution, instrumentality, commission, board or district created by the legislature of the State of Mississippi and fiscally responsible to the State of Mississippi is construed to be a part of the state government.

35 Miss. Admin. Code Pt. 4, R. 103 Rule 103

The sales, labor or service performed must be billed directly to the governmental entity and not to or through a contractor or quasi-governmental agency, and the title of the property or benefit from the service must pass to the government rather than to a beneficiary.

35 Miss. Admin. Code Pt. 4, R. 104 Rule 104

This exemption does not apply to contractor's tax levied by Code Section 27-65-21.

35 Miss. Admin. Code Pt. 4, R. 105 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 200 Sales to Government Employees

35 Miss. Admin. Code Pt. 4, R. 201 Rule 201

Sales to government employees are considered exempt when payment is made directly from the exempt governmental entity by government check, a centrally billed debit or credit card or other form of payment. Sales to government employees who pay for the goods or services are subject to Mississippi sales or use tax even though the employee may be reimbursed by an exempt governmental entity.

35 Miss. Admin. Code Pt. 4, R. 202 Rule 202

Businesses must verify that purchases are made with a centrally billed debit or credit card. Centrally billed means that the governmental entity is billed directly for any purchases made with the card. Individually billed means that the person named on the card is billed for any purchases made with the card, and the person named on the card may be reimbursed by the governmental employer for approved purchases.

35 Miss. Admin. Code Pt. 4, R. 203 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 300 Exemptions

35 Miss. Admin. Code Pt. 4, R. 301 Rule 301

Retail sales of food for human consumption purchased with food instruments issued the Mississippi Band of Choctaw Indians under the Women, Infants and Children Program (WIC) funded by the United States Department of Agriculture are exempt from tax.

35 Miss. Admin. Code Pt. 4, R. 302 Rule 302

Retail sales of food for human consumption purchased with food stamps issued by the United States Department of Agriculture, or other federal agency are exempt from and after October 1, 1987.

35 Miss. Admin. Code Pt. 4, R. 303 Rule 303

Sales of firefighting equipment to governmental fire departments or volunteer fire departments for their use. This exemption does not apply to any other type of property except firefighting equipment.

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35 Miss. Admin. Code Pt. 4, R. 304 Rule 304

Sales of any gas from any project, as defined in the Municipal Gas Authority of Mississippi Law, to any municipality shall not be subject to sales, use or other tax.

35 Miss. Admin. Code Pt. 4, R. 305 Rule 305

Sales to regional educational service agencies established under Section 37-7-345.

35 Miss. Admin. Code Pt. 4, R. 306 Rule 306

Sales of buses and other motor vehicles, and parts and labor used to maintain and/or repair such buses and motor vehicles, to an entity that (a) has entered into a contract with a school board under Section 37-41-31 for the purpose of transporting students to and from schools and (b) uses or will use the buses and other motor vehicles for such transportation purposes are exempt from sales tax.

35 Miss. Admin. Code Pt. 4, R. 307 Rule 307

Parking at events held solely for religious or charitable purposes at livestock facilities, agriculture facilities or other facilities constructed, renovated or expanded with funds for the grant program authorized under Section 18, Chapter 530, Laws of 1995 are exempt from sales tax.

35 Miss. Admin. Code Pt. 4, R. 308 Rule 308

Sales of tangible personal property, labor, services or products are exempt when sold to schools and school districts under a program that is administered by or coordinated with an agency, commission, department or other instrumentality of the United States government. Payment must be made by or through a nonprofit organization or other entity established by or for the benefit of the agency, commission, department or other instrumentality of the United States government administering or coordinating the program.

35 Miss. Admin. Code Pt. 4, R. 309 Rule 309

Federal Credit Unions organized under the Federal Credit Union Act are not subject to sales or use tax on tangible personal property or services purchased for their own use. Sales of tangible personal property or services to state and national banks and to state credit unions are subject to the retail sales and/or use tax.

35 Miss. Admin. Code Pt. 4, R. 310 Rule 310

Sales made by the exchange service, officers club or government agency to members of the armed forces are exempt from tax under the Federal Buck Act.

35 Miss. Admin. Code Pt. 4, R. 311 Rule 311

The American Red Cross is considered a federal instrumentality and is not subject to sales tax on tangible personal property or services purchased for its own use.

35 Miss. Admin. Code Pt. 4, R. 312 Rule 312

Mississippi Housing Authorities are considered part of the state government and are not subject to sales tax on tangible personal property or services purchased for their own use.

35 Miss. Admin. Code Pt. 4, R. 313 Rule 313

Materials purchased by contractors for use in the performance of a government contract are taxable. Sales by independent dealers, merchants or contractors on government reservations are taxable.

35 Miss. Admin. Code Pt. 4, R. 314 Rule 314

Sales of merchandise by governmental agencies, political subdivisions or state institutions are taxable when in competition with private business.

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35 Miss. Admin. Code Pt. 4, R. 315 Rule 315

Adequate records must be maintained to substantiate all exemptions since the Department does not issue exemption certificates. These records must be maintained for a period of at least thirty-six (36) months.

35 Miss. Admin. Code Pt. 4, R. 316 (Reserved)

35.IV.03.06 revised effective May 1, 2019.

Chapter 07 Exempt Organizations

35 Miss. Admin. Code Pt. 4, R. 100 Rule 100

Miss. Code Ann. Section 27-65-111 provides an exemption from sales tax for sales of tangible personal property and services to certain groups of organizations and for specifically named organizations. The exemption from sales tax does not cover the contractor’s taxes levied under Miss. Code Ann. 27-65-21. To qualify for the exemption, the sale of property or charge for services must be sold directly to, billed directly to and paid for directly by the exempt entity.

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

The Department of Revenue will issue a letter ruling authorizing an entity’s exemption when requested to do so by the exempt entity. The entity should make its request in writing. The Department may require the entity to furnish a copy of its charter, articles of incorporation, letter from the Internal Revenue Service documenting its tax-exempt status and any other information that may help in determining if the entity is eligible for sales tax exempt status. The letter ruling may be used to provide to vendors who request such documentation. The Department does not issue tax exempt numbers.

35 Miss. Admin. Code Pt. 4, R. 102 Rule 102

“Boys and girls clubs”, found in Miss. Code Ann. Section 27-65-111(f), means a nonprofit youth organization. To be eligible for the sales tax exemption, the organization must meet the following requirements: 1. The organization must be registered with the Internal Revenue Service as a 501(c)(3) entity. 2. The organizations sole purpose is to provide and manage youth activities. 3. The organization must be active. The term “active” means that the organizations principle activity must be continued for a total of at least 10 months out of a year. (Example: A youth baseball club would be required to provide organized activities for 10 months out of the year.) This exemption will apply only to those purchases that remain the property of the organization. The exemption would not apply to the purchase of uniforms that are provided to the players through either the payment of a registration fee or a separate charge.

35 Miss. Admin. Code Pt. 4, R. 103 Rule 103

“Old Men’s or Ladies’ Homes”, found in Miss. Code Ann. Section 27-65-111(e), means a place that provides group living arrangements for elderly persons who are provided food, shelter, personal and medical care. The elderly persons must be unrelated to the operator unless approved in a letter ruling by the Department. This includes facilities such as nursing homes, convalescent homes and assisted living facilities. Additionally, the facility must be supported wholly or in part by a religious denomination, fraternal nonprofit organization or other nonprofit organization.

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35 Miss. Admin. Code Pt. 4, R. 104 Rule 104

“Orphanages”, found in Miss. Code Ann. Section 27-65-111(e), means a place, facility or home that receives children and provides for long-term or extended supervision, care, lodging and maintenance of the child, with or without transfer of custody. Children must not be related to the operators, and parents or guardians must not be residents of the same facility unless approved in a letter ruling by the Department. Additionally, the facility must be supported wholly or in part by a religious denomination, fraternal nonprofit organization or other nonprofit organization.

35 Miss. Admin. Code Pt. 4, R. 105 Rule 105

Exempt organizations can be found in Miss. Code Ann. Sections 27-65-101, 27-65-103, 27-65-105, 27-65-107 and 27-65-111.

35 Miss. Admin. Code Pt. 4, R. 106 (Reserved)

35.IV.03.07 revised effective September 1, 2018.

Chapter 08 Amusements

35 Miss. Admin. Code Pt. 4, R. 100 Definitions

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

Amusement is defined to include any and all forms of entertainment including all forms of diversion, sport, recreation or pastime, shows, exhibitions, contests, displays and games, or any other types of amusement.

35 Miss. Admin. Code Pt. 4, R. 102 Rule 102

Admissions charges include monetary charges and all other methods of obtaining admission including donations or contributions. Taxable charges also include admissions to an event in exchange for specific personal or professional services such as, but not limited to, advertising or security services. Taxable admission charges include but are not limited to cover charges or one time fees for admission to museums, restaurants and bars, galleries and gyms or fitness centers. Admission charges do not include membership fees. Membership fees represent a cost to join an organization, group, club, etc., and do not represent the cost for admission even though membership may grant admission to the member.

35 Miss. Admin. Code Pt. 4, R. 103 Rule 103

Religious organizations are defined as ecclesiastical or denominational organizations, churches, diocese or presbytery or established physical places for worship, whether or not incorporated, at which nonprofit religious services and activities are regularly conducted and carried on and also includes those religious groups which do not maintain specific places of worship.

35 Miss. Admin. Code Pt. 4, R. 104 Rule 104

Charitable organizations are defined as any person determined by the Internal Revenue Service to be a tax exempt organization pursuant to Section 501(c)(3) of the Internal Revenue Code; or any person actually or purporting to be established solely for any voluntary health and welfare, benevolent, philanthropic, patriotic, educational, humane, scientific, public health, environmental conservation, civic, or other charitable purpose or

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for the benefit of law enforcement personnel, fire fighters, or other public safety organizations.

35 Miss. Admin. Code Pt. 4, R. 105 Rule 105

Education organizations are defined as any person providing educational, informative or instructional services.

35 Miss. Admin. Code Pt. 4, R. 106 Rule 106

Civic Clubs are defined as any association, society, foundation or other entity that is determined by the Internal Revenue Service to be a tax exempt organization pursuant to Section 501(c)(3) of the Internal Revenue Code established for purposes relating to or providing benefit for any citizen or city. Local chapters organized under a national organization will be treated as a part of the tax exempt national organization if the local chapter has not obtained its own designation from the Internal Revenue Service.

35 Miss. Admin. Code Pt. 4, R. 107 Rule 107

Fraternal organizations are defined as any association, fraternity, sorority or other entity determined by the Internal Revenue Service to be a tax exempt organization pursuant to Section 501(c)(3) of the Internal Revenue Code operating as a social, charitable or service organization.

35 Miss. Admin. Code Pt. 4, R. 108 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 200 Levy

35 Miss. Admin. Code Pt. 4, R. 201 Rule 201

Miss. Code Ann. Section 27-65-22(1) levies a tax at the rate of 7% on the gross income from admissions charges held at any place of amusement or activity as defined above.

35 Miss. Admin. Code Pt. 4, R. 202 Rule 202

The tax is due at the rate of 3% on the gross income from admissions charges to a publicly owned enclosed coliseum or auditorium. However, this reduced rate is not applicable to athletic contests between colleges and universities. Admissions charges to such events are taxable at the rate of 7%.

35 Miss. Admin. Code Pt. 4, R. 203 Rule 203

The tax is due at the rate of 7% on the gross income from admissions charges to events conducted and held at the Mississippi Veterans Memorial Stadium.

35 Miss. Admin. Code Pt. 4, R. 204 Rule 204

The tax levied under Miss. Code Ann. Section 27-65-22(1) is to be collected by the operator of the place of amusement and is to be in addition to the price charged for admission. Tax will be collected on the gross income received including associated charges. The operator may enter into an agreement with a ticket sales agent whereby the agent actually collects the tax.

35 Miss. Admin. Code Pt. 4, R. 205 Rule 205

When a temporary amusement is held at a facility and conducted by a promoter who is not the owner, lessee or custodian of the facility, the promoter is required to notify the Department of such event and will be required to register the event and will be liable for the tax. In the event the promoter does not register and pay the tax as required, the owner, lessee or custodian of the facility will be jointly liable for the tax.

35 Miss. Admin. Code Pt. 4, R. 206 (Reserved)

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35 Miss. Admin. Code Pt. 4, R. 300 Exemptions

35 Miss. Admin. Code Pt. 4, R. 301 Rule 301

The tax levied under Miss. Code Ann. Section 27-65-22(1) is not due from the following: 1. Admissions charges at a place of amusement operated by religious, charitable or educational organizations or by nonprofit civic clubs or fraternal organizations when one of the following qualifications is met: a. The proceeds may not be used to the benefit of any one or more individuals of the organization and are used solely for religious, charitable or education purposes; or b. The entire proceeds are used to defray the normal operating expenses of the organization. 2. Admissions charges to gospel singing promoted by nonprofit charitable or religious organizations. 3. Admissions charges for high school or grade school athletic games. 4. Admissions charges to ticket sales for baseball games between teams operated under a professional league franchise. 5. Admissions charges to county, state or community fairs and to entertainments held in publicly owned community homes or houses. 6. Admissions charges or ticket sales to garden pilgrimages and to antebellum and historic houses when sponsored by an organized civic or garden club. 7. Admissions charges to golf tournaments held under the Professional Golf Association or the United States Golf Association. a. The tournament must be sponsored by a nonprofit association incorporated under the laws of the State of Mississippi; and b. The proceeds of such tournament may not benefit any individual or group and dividends may not be declared. 8. Admissions charges to any university or community college conference, state, regional or national playoffs or championships. 9. Admissions charges or fees charged by any county or municipally owned and operated swimming pools, golf courses and tennis courts. This exemption does not cover the sales and rentals of tangible personal property. The exemption does cover facilities owned and operated by state supported colleges and universities. 10. Admissions charges for symphony orchestra, opera, vocal or instrumental performances where professional or amateur performers are compensated from the proceeds of the admissions charges and amateur or professional dramatic productions when both of the following conditions are met; a. The event must be sponsored by a local music or charity association or by a children’s dramatic association; and b. The association may not declare dividends, receive profits, pay salary or other compensation to any members and may not pay any person for producing the performance. 11. Admissions charges or ticket sales to any hockey games between teams operated under a professional league franchise. 12. Admissions charges or ticket sales to any event sanctioned by the Mississippi Athletic Commission when the event is held within a publicly owned enclosed coliseum or auditorium.

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Guided tours on any navigable waters of this state, which include providing accommodations, guide services and/or related equipment operated by or under the direction of the person providing the tour, for the purposes of outdoor tourism. 14. Any admissions to events held solely for religious or charitable purposes at livestock facilities, agriculture facilities or other facilities constructed, renovated or expanded with funds from the grant program authorized under Section 18 of Chapter 530, Laws of 1995.

35 Miss. Admin. Code Pt. 4, R. 302 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 400 Purchases or Donation

35 Miss. Admin. Code Pt. 4, R. 401 Rule 401

Any charitable fund raising events that are open to the public and sponsored, organized or hosted by nonprofit civic, fraternal, educational, religious or charitable organizations are exempt from tax on the gross income received from admissions charges, however, sales or use tax is due on any purchases or donations made for the event.

35 Miss. Admin. Code Pt. 4, R. 402 Rule 402

Food, drinks, and supplies purchased for the event are taxable on the purchase price or cost. The tax must be paid to the vendor at the time of purchase or paid directly to the Department of Revenue on the cost of items brought into this state.

35 Miss. Admin. Code Pt. 4, R. 403 Rule 403

Food or drink donated for the event is taxable on the cost of such items as a withdrawal from stock or inventory. The tax must be paid to the Department by the person(s) making the donation. The cost of the donated items should be added to the total sales on the next return due.

35 Miss. Admin. Code Pt. 4, R. 404 Rule 404

Items purchased for sale or auction at the event are taxable on the purchase price or cost. This tax must be paid to the vendor at the time of purchase, or paid directly to the Department by the event sponsor on the cost or value of any items brought into this state.

35 Miss. Admin. Code Pt. 4, R. 405 Rule 405

Any items donated for sale at the event are taxable on the cost or value of the items being donated. This tax should be paid directly to the Department by the person(s) making the donation.

35 Miss. Admin. Code Pt. 4, R. 406 Rule 406

Tax is due on all purchases necessary to operate the organization unless the organization holds a valid exemption from sales tax authorized under Miss. Code Ann. Section 27-65- 111.

35 Miss. Admin. Code Pt. 4, R. 407 (Reserved)

35.IV.3.08 revised effective April 1, 2018.

Chapter 09 Out of State Sales into the State

35 Miss. Admin. Code Pt. 4, R. 100 Rule 100

Sellers who lack physical presence nexus in Mississippi but who are purposefully or systematically exploiting the Mississippi market have a substantial economic presence for

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use tax purposes if their sales into the state exceed $250,000 for the prior twelve months. These sellers are required to register with the Department of Revenue in order to collect and remit tax as provided by Miss. Code Ann. Section 27-67-4(2)(e).

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

Purposefully or systematically exploiting the market includes but is not limited to: 1. Television or Radio advertising on a Mississippi station; 2. Telemarketing to Mississippi customers; 3. Advertising on any type of billboard, wallscape, bus bench, interiors and exteriors of buses or other signage located in Mississippi; 4. Advertising in Mississippi newspapers, magazines or other print media; 5. Emails, texts, tweets and any form of messaging directed to a Mississippi customer; 6. Online banner, text or pop up advertising directed toward Mississippi customers; 7. Advertising to Mississippi customers through applications “apps” or other electronic means on customer’s phones or other devices; or 8. Direct mail marketing to Mississippi customers.

35 Miss. Admin. Code Pt. 4, R. 102 Rule 102

As provided by Miss. Code Ann. Section 27-67-1 et seq., sellers with a substantial economic presence must add to the sales price of tangible personal property the amount of tax imposed on the purchaser. The tax must be stated separately from the sales price on the invoice and accounted for separately on the seller’s records.

35 Miss. Admin. Code Pt. 4, R. 103 Rule 103

This rule applies to all transactions occurring on or after December 1, 2017. However, any seller who has collected and not remitted Mississippi tax on sales made before December 1, 2017 would still be liable for any tax collected.

35 Miss. Admin. Code Pt. 4, R. 104 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 35.4.03.09 effective December 1, 2017

Subpart 4 Retail

Chapter 01 Gasoline Distributors and Service Stations

35 Miss. Admin. Code Pt. 4, R. 100 Rule 100

The term motor fuel means gasoline, butane, diesel, ethanol, biodiesel, natural gas or any other fuel used to propel or power motor vehicles or stationary engines.

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

Wholesale sales of motor fuel, motor oils, lubricants, tires, batteries, accessories and other sales by a distributor to licensed retailers for resale are exempt from sales tax.

35 Miss. Admin. Code Pt. 4, R. 102 Retail sales of motor fuel are exempt from sales tax

35 Miss. Admin. Code Pt. 4, R. 103 Rule 103

All other services of a service station, including but not limited to, washing, greasing, and tire repairing are taxable at the regular retail rate of sales tax.

35 Miss. Admin. Code Pt. 4, R. 104 Rule 104

Charges for wrecker or towing services where no other taxable services are provided are exempt from sales tax. When wrecker or towing services are provided in connection

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with other services that are taxable (repairs, storage or other similar services), the total amount is subject to the regular retail rate of tax. The separate invoicing of the wrecker or towing services would not affect the taxability of the charges. The taxability of wrecker or towing services is determined for each instance that includes this service and not for the business as a whole.

35 Miss. Admin. Code Pt. 4, R. 105 Rule 105

The tax is due on the total selling price without any deduction for federal or state excise taxes on oil or grease, or Federal manufacturers’ excise taxes on tires, tubes and batteries. The selling price also includes carrying charges or any other amount added because of deferred payments. Sales must include the value of merchandise withdrawn from stock for use in the business or for personal use by the owner. Sales to customers using courtesy cards or letters of credit are taxable as cash sales.

35 Miss. Admin. Code Pt. 4, R. 106 Rule 106

All tools, supplies and equipment used in conducting the business of a service station or bulk distributor are taxable at the regular retail rate of sales or use tax. The tax paid on such purchases is not deductible as a tax credit from the retail tax liability.

35 Miss. Admin. Code Pt. 4, R. 107 Rule 107

Adequate records must be maintained to substantiate tax classifications of sales and purchases.

35 Miss. Admin. Code Pt. 4, R. 108 (Reserved)

35.IV.4.01 revised effective August 8, 2025

Chapter 02 Marble Works and Monument Sales

35 Miss. Admin. Code Pt. 4, R. 100 Rule 100

Sales of monuments, memorials, markers, cornerstones and building materials by manufacturers and dealers are subject to the regular retail rate of sales tax on the gross proceeds of sales.

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

The following types of sales are considered wholesale sales and are exempt from sales tax: 1. Sales to licensed dealers or retailers for resale through the regular course of business. 2. Sales to qualified contractors holding a Material Purchase Certificate when the marble or granite products are to become a component part of a structure. 3. Sales to manufacturers for further processing.

35 Miss. Admin. Code Pt. 4, R. 102 Rule 102

Charges for lettering or engraving monuments, memorials, etc., are included in gross proceeds of sales derived from the sale of tangible property. The amount received for lettering or engraving a customer’s monument, memorial, etc., is not included as gross proceeds of sales when no sale of tangible property is involved. For example, when additional inscriptions are desired on a customer’s memorial, the charges for engraving are exempt.

35 Miss. Admin. Code Pt. 4, R. 103 Rule 103

Charges by the seller for delivery and/or installation of a monument, memorial, etc., are taxable at the regular retail rate of tax, even though such charges are itemized on the sales invoice.

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35 Miss. Admin. Code Pt. 4, R. 104 Rule 104

Purchases of manufacturing machinery, machine parts or hand tools by manufacturers of monuments and marble products are taxable at the 1

% special rate of sales or use tax. Purchases of raw materials to become a component part of the finished product for sale, industrial chemicals for use in the manufacturing process and lumber for use in crating monuments for shipment are exempt from sales or use tax.

35 Miss. Admin. Code Pt. 4, R. 105 Rule 105

Rental of machinery and other tangible personal property is taxed at the same rate as sales of the same property.

35 Miss. Admin. Code Pt. 4, R. 106 Rule 106

Adequate records must be maintained to substantiate tax classifications of sales and purchases.

35 Miss. Admin. Code Pt. 4, R. 107 (Reserved)

35.IV.04.02 revised effective May 15, 2019

Chapter 03 Coin Operated and Vending Machines

35 Miss. Admin. Code Pt. 4, R. 100 Definitions

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

A “vending machine” is a coin, currency or credit card operated device that is used to sell tangible personal property without requiring the vendor’s attendance at the time of the sale.

35 Miss. Admin. Code Pt. 4, R. 102 Rule 102

"Full service vending machine operators" or "full line vendors" are persons in the business of placing vending machines and selling tangible personal property through the machines. A space rental fee is paid to the business owner of the property where the machine is placed. A person placing a vending machine on their own property is not a full line vendor.

35 Miss. Admin. Code Pt. 4, R. 103 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 200 Business Owners

35 Miss. Admin. Code Pt. 4, R. 201 Rule 201

Sales of tangible personal property made through vending machines, owned by the business where the machines are located are taxable at the regular retail rate of tax on the gross proceeds of sales when the business owner controls the collection of receipts.

35 Miss. Admin. Code Pt. 4, R. 202 Rule 202

Persons in the business of selling tangible personal property through vending machines may make purchases of merchandise exempt from sales tax.

35 Miss. Admin. Code Pt. 4, R. 203 Rule 203

The owner of the premises shall keep records showing the gross receipts of each machine located on the premises.

35 Miss. Admin. Code Pt. 4, R. 204 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 300 Full Line Vendors

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35 Miss. Admin. Code Pt. 4, R. 301 Rule 301

Sales of merchandise, excluding sales of food or drink for human consumption, through vending machines serviced by full line vendors are subject to the seven percent (7%) regular retail rate of tax based on the gross proceeds of such sales.

35 Miss. Admin. Code Pt. 4, R. 302 Rule 302

Sales of food and drink for human consumption made through vending machines that only contain food and drink, and are serviced by full line vendors, are not taxable. Food and drink for human consumption withdrawn from inventory by full line vendors to be placed in full service vending machines is taxable at the 8% wholesale rate of tax based on the cost. The tax liability accrues to the full line vendor at the time of withdrawal and should be remitted to the State in the same manner as any other sales tax collected by the full line vendor on taxable sales.

35 Miss. Admin. Code Pt. 4, R. 303 Rule 303

The receipts from machines containing only food and drink for human consumption provided by full line vendors are exempt from the seven percent (7%) retail tax.

35 Miss. Admin. Code Pt. 4, R. 304 Rule 304

Sales of food or drink for human consumption and other merchandise when sold from the same vending machine are subject to the seven percent (7%) regular retail rate of tax based on the gross proceeds of such sales. The eight percent (8%) wholesale rate based on the cost of withdrawal of inventory of food and drink for human consumption does not apply.

35 Miss. Admin. Code Pt. 4, R. 305 Rule 305

All full line vendors must obtain a sales tax permit to engage in business. This permit is sufficient for all machines operated by one owner, regardless of location. This sales tax license or permit is in addition to all other city, county and state privilege licenses or permits that may be required.

35 Miss. Admin. Code Pt. 4, R. 306 Rule 306

Complete records must be kept by the full line vendor showing the location of each machine, date of installation, and date of removal from any location, and also the purchases and inventories of merchandise bought for all vending machines and gross receipts derived from the operations at each location.

35 Miss. Admin. Code Pt. 4, R. 307 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 400 Amusement and Music Machines

35 Miss. Admin. Code Pt. 4, R. 401 Rule 401

Income received from the operations of amusement and music machines is exempt from sales tax. However, clear and adequate records must be maintained by the owner of the machines to substantiate their claims for exemption.

35 Miss. Admin. Code Pt. 4, R. 402 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 500 Purchases of Equipment and Supplies

35 Miss. Admin. Code Pt. 4, R. 501 Rule 501

The owners of vending machines whether for vending, amusement or music are the users of such property and as such are required to pay the regular retail rate of sales or use tax

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on all purchases of machines, machine parts, phonograph records, needles and other accessories or supplies.

35 Miss. Admin. Code Pt. 4, R. 502 (Reserved)

35.IV.4.03 revised effective December 1, 2019

Chapter 04 Photographers and Film Developers

35 Miss. Admin. Code Pt. 4, R. 100 Photographers and Videographers

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

Photographers and videographers are taxable at the regular retail rate of sales tax on retail sales to consumers of photographs, pictures, videos, disc, and other tangible personal property or specified digital products and no tax is due on sales to licensed retailers for resale.

35 Miss. Admin. Code Pt. 4, R. 102 Rule 102

A photographer taking and selling pictures in Mississippi is subject to sales tax on his sales even if his studio and photo finishing activities are in another state.

35 Miss. Admin. Code Pt. 4, R. 103 Rule 103

A photographer who creates digital images that are marketed via the internet through a third party that also prints the images as photographs and delivers them to purchasers is subject to sales tax as long as the photographer controls the sales of the images. The photographer will be considered to control the sale of the images if the website on which the images are posted appears to be the photographer’s own site; the photographer is able to design or direct the appearance of the site from which the images are sold; the photographer sets the price for the images; the photographer determines how long the images will be offered on the website for sale; the photographer displays the website address on his marketing materials directing customers to the site to purchase his images; and/or the photographer otherwise exercises control over the marketing, sale or reproduction of the images he creates.

35 Miss. Admin. Code Pt. 4, R. 104 Rule 104

Amounts received from the sale of coupons must be included in gross income of the photographer even though the agent making the sale retains the full amount of the coupon as his commission for having obtained a customer. If the customer fails to redeem the coupon and the amount paid is not refunded, the income received is taxable.

35 Miss. Admin. Code Pt. 4, R. 105 Rule 105

When schools or other organizations are allowed a commission for handling the sales of a photographer or photo finisher, such commission must be included in the income of the business.

35 Miss. Admin. Code Pt. 4, R. 106 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 200 Film Making

35 Miss. Admin. Code Pt. 4, R. 201 Rule 201

Income from the production of a film, such as commercials, promotional videos, advertisements, etc., is not considered the sale of tangible personal property or specified digital products and as such, is not subject to sales tax. If the producer or developer of such

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film produces multiple copies for sale, the activity then becomes taxable as the sale of tangible personal property or specified digital products.

35 Miss. Admin. Code Pt. 4, R. 202 Rule 202

Purchases of film or videotape for use in performing a service are taxable for sales or use tax. Purchases of film or videotape that are to be resold are exempt from sales or use tax.

35 Miss. Admin. Code Pt. 4, R. 203 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 300 Motion Picture Making

35 Miss. Admin. Code Pt. 4, R. 301 Rule 301

Certain exemptions and a reduced rate are available for machinery, equipment and supplies used in the production of a motion picture in Mississippi. The term “motion picture” is defined to mean a nationally distributed feature-length film, video, television series or commercial made in Mississippi and does not include the production of television coverage of news and athletic events, or a film, video, television series or commercial that contains any material or performance defined in Section 97-29-103.

35 Miss. Admin. Code Pt. 4, R. 302 Rule 302

Machinery and equipment used in the production of motion pictures shall be defined as manufacturing machinery subject to the special reduced rate of 1½%. Equipment or machinery bought or leased outside of Mississippi for exclusive use on location in Mississippi will be subject to a use tax of 1½%. Manufacturing machinery that is used in the production of a motion picture is not limited to a plant site use. Items defined as manufacturing machinery include: 1. Audio Equipment 2. Camera Equipment 3. Computer Equipment (for animation, editing or special effects) 4. Editing Equipment 5. Lighting Equipment 6. Projection Equipment 7. Sound Equipment

35 Miss. Admin. Code Pt. 4, R. 303 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 400 Film Developing

35 Miss. Admin. Code Pt. 4, R. 401 Rule 401

Income received from developing, retouching, printing, tinting or other photo finishing activities is taxable at the regular retail rate of tax when performed for a consumer and no tax is due when performed for other licensed retailer for resale.

35 Miss. Admin. Code Pt. 4, R. 402 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 500 Purchases

35 Miss. Admin. Code Pt. 4, R. 501 Rule 501

Purchases by licensed retailers of merchandise for resale are exempt from sales or use tax.

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35 Miss. Admin. Code Pt. 4, R. 502 Rule 502

Purchases of paper and film for use in making photographs are exempt from sales or use tax as raw materials and chemicals used in processing the same are likewise exempt. Machinery and machinery parts for studio use in developing film, photographs, prints or slides are taxable at the 1½% reduced rate of tax. Machinery or equipment provided for customer use to copy or reproduce photographs are subject to the 7% regular rate of tax.

35 Miss. Admin. Code Pt. 4, R. 503 (Reserved)

35.IV.4.04 revised effective October 16, 2021

Chapter 05 Printing Industry

35 Miss. Admin. Code Pt. 4, R. 100 General

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

The term “Printer” includes publisher and other producers or reproducers of lettering or images of any kind on paper, printing plates or other material. Providing copiers, printers or other machinery in the owner’s place of business for use by customers who make their own printed material for a fee does not fall under the term “Printer”.

35 Miss. Admin. Code Pt. 4, R. 102 Rule 102

Gross proceeds of sales by persons engaging in the printing business are taxable at the regular retail rate of tax on the total charge with the following exceptions: 1. Sales of printed matter or printing services to licensed dealers for resale at retail in the regular course of business are exempt from sales tax. 2. Where stamped envelopes or post cards are purchased and printed for the customers, the amount of the postage may be deducted from the total charge. 3. Sales of daily or weekly newspapers and periodicals or publications of scientific, literary or educational organizations which are exempt from Federal income taxation under Section 501(c)(3) of the Internal Revenue Code of 1954 as it existed as of March 31, 1975, are exempt from sales tax. 4. Printed products that are delivered outside of this state are exempt from sales tax.

35 Miss. Admin. Code Pt. 4, R. 103 Rule 103

Purchases by a printer of ink, printing stock, staples, stapling wire, binding twine, glue and other tangible personal property which become a component part of the printed matter, or are coated upon or impregnated therein, are purchases of raw materials and exempt from tax. Purchases of component materials which are used or consumed by the printer in the fabrication of plates incidental to a customer printing job are likewise deemed to be component materials and exempt from tax provided that title to such property passes to the customer.

35 Miss. Admin. Code Pt. 4, R. 104 Rule 104

Purchases of machinery, machine parts, computers, digital equipment, or software used directly in the printing or reproduction process are taxable at the 1 1/2% special rate of tax. Purchases of electric power or other fuels used directly in the printing or reproduction process are exempt from sales tax.

35 Miss. Admin. Code Pt. 4, R. 105 Rule 105

Purchases of other equipment and supplies are taxable at the regular retail rate of tax. Such other equipment includes but is not limited to inserters or mail sorting equipment.

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Purchases of copiers and other equipment provided for use by customers who make their own printed material are taxable at the regular retail rate of tax.

35 Miss. Admin. Code Pt. 4, R. 106 Rule 106

Rental or lease of machinery and other tangible personal property is taxed at the same rate as sales of the same property.

35 Miss. Admin. Code Pt. 4, R. 107 Rule 107

Adequate records must be maintained to substantiate tax classifications of sales and purchases.

35 Miss. Admin. Code Pt. 4, R. 108 (Reserved)

Chapter 06 Paper Products and Paper Dealers

35 Miss. Admin. Code Pt. 4, R. 100 Rule 100

Sales of paper products are classified according to the intended use of the product.

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

Paper products include, but are not limited to, brochures, manuals, cardboard boxes, wrapping paper, napkins, labels, tickets, memo pads, sticky notes, and advertising materials.

35 Miss. Admin. Code Pt. 4, R. 102 Rule 102

Sales of raw materials to manufacturers or custom processors are exempt. Paper products sold to manufacturers, custom processors or wholesalers as shipping materials to accompany goods sold are exempt from sales tax.

35 Miss. Admin. Code Pt. 4, R. 103 Rule 103

Paper products sold to licensed retailers for resale and containers used as shipping materials to accompany goods or services sold by the retailer are exempt.

35 Miss. Admin. Code Pt. 4, R. 104 Rule 104

Sales of materials for use by the purchaser for his own consumption, such as advertising, sales promotion materials, supplies, or materials furnished to merchants are taxable at the regular retail rate of tax.

35 Miss. Admin. Code Pt. 4, R. 105 Rule 105

The schedule below provides guidance in determining the correct tax treatment when paper dealers sell paper products:

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Paper Products Retailers (For Resale) Other Retailers- Grocery stores, restaurants, cafeterias, convenience stores, dept. stores, etc. Consumer - Product used for individuals or businesses own use, including employees of seller, churches & religious institutions, private schools, colleges, & hospitals, offices, hotels, motels, professionals, etc. Manufacturers & Processors Laundries & Dry Cleaners Government agencies, nonprofit private schools, public schools, nonprofit hospitals & public hospitals. Type of Paper Product Sold: Advertising Materials - Including matches, brochures, leaflets, hand bills, manuals, signs, catalogs, etc. Exempt Regular Retail Regular Retail Regular Retail Regular Retail Exempt Containers - Including bags, boxes, sacks, cartons, cases, wrapping paper, twine, tape, collar tabs, shirt boards, coat hangers, cups, plates, napkins, forks, spoons, straws, waxed paper, car lining paper, labels & other one time use containers. Exempt Exempt Regular Retail Exempt Exempt Exempt Supplies - Including table cloths, towels, toilet tissue, confetti, party novelties, menus, sales pad, tickets, memo pads, prescription blanks, office supplies, etc. Exempt Regular Retail Regular Retail Regular Retail Regular Retail Exempt Miscellaneous - Tags, manuals, data sheets, inspection slips, price lists, advertising materials, warranty slips and other items to accompany product mfg. for sale. Exempt Regular Retail Regular Retail Exempt Regular Retail Exempt When Sold to:

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35 Miss. Admin. Code Pt. 4, R. 106 (Reserved)

35.IV.4.06 revised effective March 1, 2020

Chapter 07 Automotive Parts Jobbers

35 Miss. Admin. Code Pt. 4, R. 100 Rule 100

Sales of automotive parts to consumers are taxable at the regular retail rate of tax. Sales of automotive parts to licensed retail dealers, garages, automobile dealers or service stations who resell such parts on vehicles sold in the regular course of business, are wholesale sales and exempt from sales tax. “Wholesale sales” shall not include a transaction whereby property is delivered to and collection for same is made from a person that will consume the property rather than resell it even though the billing is to a licensed retailer.

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

Sales to licensed dealers of materials which become components of a product for sale or repair, such as paint, thinner, body solder, welding rods, flux, polish, rubber cement, etc., are exempt from sales tax.

35 Miss. Admin. Code Pt. 4, R. 102 Rule 102

Sales of supplies and equipment to be used by body shops, service stations, garages, dealers, etc., are taxable at the regular retail rate of sales tax. Examples: tools, cleaning materials, display and advertising equipment, sandpaper, oxygen and acetylene.

35 Miss. Admin. Code Pt. 4, R. 103 Rule 103

“Shade tree” mechanics that are not registered for sales tax as garages are classified as consumers, taxed at the regular retail rate of tax on purchases.

35 Miss. Admin. Code Pt. 4, R. 104 Rule 104

Copies of sales invoices and adequate records must be maintained to substantiate sales classifications.

35 Miss. Admin. Code Pt. 4, R. 105 (Reserved)

Chapter 08 Sales and Installations of Personal Property

35 Miss. Admin. Code Pt. 4, R. 100 General

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

Any person selling and installing personal property as a business activity is taxed by Miss. Code Ann. Section 27-65-17 on gross proceeds of sales, which include installation charges as defined by Miss. Code Ann. Section27-65-3. Persons not in the business of selling who only install the owner's personal property are not subject to tax on labor charged to the owner unless taxed as a service provided by Miss. Code Ann. Section 27-65-23.

35 Miss. Admin. Code Pt. 4, R. 102 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 200 Definitions

35 Miss. Admin. Code Pt. 4, R. 201 Rule 201

"Business activity" includes any activity or act engaged in (personal or corporate) for benefit or advantage, either direct or indirect and does not require that an inventory of goods be maintained.

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35 Miss. Admin. Code Pt. 4, R. 202 Rule 202

"Installation" means the application of tangible personal property to real or personal property regardless of whether it becomes a part of the real property or retains its personal property classification. Examples of installed sales, or sales of property set in place are:

Aluminum and plastic siding; 2. Appliances; 3. Awnings; 4. Carpets; 5. Carports; 6. Drapes; 7. Fences; 8. Floor coverings; 9. Gasoline pumps; 10. Glass; 11. Machinery; 12. Office and business equipment 13. Pipe organs 14. Roofing; 15. Store fixtures; 16. Tile 17. Tombstones; 18. Window air conditioning units; 19. Window guards; and 20. Similar property

35 Miss. Admin. Code Pt. 4, R. 203 Rule 203

“Installation” does not include general construction work and carpentry when the majority of the activity is the erection of the structure of a building or other real property.

35 Miss. Admin. Code Pt. 4, R. 204 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 300 Tax Rates

35 Miss. Admin. Code Pt. 4, R. 301 Rule 301

Commercial contracts over $10,000 for the installation of personal property which qualify as an activity under Miss. Code Ann. Section 27-65-21 will be taxed at 3 ½% (see Title 35, Miss. Admin. Code, Part IV, Subpart 10, Chapter 1). Activities which may qualify under this section are roofing, siding, tile setting, glass, floor covering and fence installation.

35 Miss. Admin. Code Pt. 4, R. 302 Rule 302

Suppliers who contract for less than $ 10,000 primarily for the sale and installation of property listed in this regulation, which may include some incidental construction or carpentry services, are taxed on the full installed sales price of the job, to include labor and materials, at the regular retail rate of tax (for example, the sale and installation of roofing, tile, carpets, etc.)

35 Miss. Admin. Code Pt. 4, R. 303 Rule 303

Similar contracts for a noncommercial structure, in any amount, are also taxable on the full installed sales price, to include labor and materials, of the job at the regular retail rate of tax. Such noncommercial contracts do not qualify for the reduced rate of contractor’s tax provided by Miss. Code Ann. Section 27-65-21. No sales tax is due when sold for resale to and installed for another dealer in such property.

35 Miss. Admin. Code Pt. 4, R. 304 (Reserved)

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35 Miss. Admin. Code Pt. 4, R. 400 Burglar and Fire Alarm Systems

35 Miss. Admin. Code Pt. 4, R. 401 Rule 401

When as the result of signing a monitoring contract, the alarm company provides and installs the alarm system for free or at reduced cost, the equipment is not taxed for use tax or treated as a withdrawal from inventory. Sales tax is due on the amount received from the customer. The monitoring service is taxable regardless of where the monitoring is taking place.

35 Miss. Admin. Code Pt. 4, R. 402 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 500 Sales of Concrete and Asphalt

35 Miss. Admin. Code Pt. 4, R. 501 Rule 501

All sales of concrete and asphalt are taxable at the regular retail rate of tax unless the purchaser provides a valid exemption. A valid exemption means that the purchaser is an entity exempt from sales tax under Miss. Code Ann. Section 27-65-101 through 27-65-111; or that the purchaser holds an MPC number or direct pay permit issued under Miss. Code Ann. Section 27-65-21 or 27-65-93, respectively. Additional information on the treatment of concrete and asphalt sales may be found in Title 35, Mississippi Administrative Code, Part IV, Subpart 10, Chapter 01.

35 Miss. Admin. Code Pt. 4, R. 502 (Reserved)

35.IV.04.08 revised effective June 1, 2007

Chapter 09 Manufactured Housing

35 Miss. Admin. Code Pt. 4, R. 100 Rule 100

Manufactured home (mobile home) is defined as a structure that is transportable in one or more sections and is built on a permanent chassis. A manufactured home is designed for use as a dwelling or office with or without a permanent foundation when connected to required utilities. The sale or lease of manufactured homes is taxed at the reduced rate of 3%.

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

Items permanently attached to and becoming a component part of the manufactured home at the time of the sale are included in the purchase price that is taxable at 3%. Examples would be a built-in dishwasher and central heating and air conditioning. Appliances sold and shipped by the manufacturer with the home and included in the overall price of the home from the manufacturer are also considered part of the manufactured home taxable at the reduced rate of 3%. Other furniture and freestanding appliances purchased and resold by the manufactured home dealer are taxable at the 7% rate of tax. The sales price of the additional freestanding furniture and appliances should be separately stated from the sales price of the manufactured home. Likewise, the 7% sales tax should also be separately stated from the 3% sales tax.

35 Miss. Admin. Code Pt. 4, R. 102 Rule 102

Purchases of labor and parts for repair are exempt when purchased by a registered manufactured home dealer for reconditioning used manufactured homes to be resold. Sales of repairs, repair parts and replacement parts to owners of manufactured homes are taxable at the 7% rate of tax.

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35 Miss. Admin. Code Pt. 4, R. 103 Rule 103

Amounts included in the sale of a manufactured home for “set up charges” are taxed at the same rate as the manufactured home. These charges are limited to the site built supporting parts upon which the manufactured home is placed. It includes all exterior materials required to physically screen or shield such supports including skirting and basic entry steps required for exterior doors. Charges by the manufactured home dealer to run the utilities to the site where the manufactured home will be set up are taxable at the 7% rate of tax. This includes running the utilities to the site and installing the electrical pole and or the water meter. The manufactured home dealer should provide their sales tax account number to the utility company, plumber or electrician to purchase these services exempt for resale.

35 Miss. Admin. Code Pt. 4, R. 104 Rule 104

Other charges for general home site preparation such as, but not limited to the grading of the home site, providing fill dirt or other fill materials for preparation of the home site, installation of a septic tank system or running utilities to the home site are not defined as set up charges. If the manufactured housing dealer provides these services to his customer, then the manufactured housing dealer is considered to be reselling such services and should provide his tax number to the vendor or contractor providing such services. The manufactured housing dealer is responsible for collecting and remitting 7% tax on all additional charges that are not “set up charges”.

35 Miss. Admin. Code Pt. 4, R. 105 Rule 105

The manufactured home dealer should pay 7% sales tax on the cost of materials for any carpentry work performed for the customer at the manufactured home site. This includes onsite construction of decks and other similar structures. The manufactured home dealer should pay 7% sales tax on purchases of concrete from a mix plant or asphalt for use in construction of foundation runners, pilings, piers, driveways, patios or other similar structures. No sales tax should be charged to the customer for these construction services.

35 Miss. Admin. Code Pt. 4, R. 106 Rule 106

Any taxpayer operating a new or used mobile home dealership shall be required to post a cash or surety bond prior to receiving a Sales Tax Permit to engage in business. The amount of the bond shall be $25,000 for a new mobile home dealer and $10,000 for a used mobile home dealer, unless the taxpayer or Commissioner can show cause for another amount to be accepted.

35 Miss. Admin. Code Pt. 4, R. 107 Rule 107

35 Miss. Admin. Code Pt. 4, R. 108 (Reserved)

35.IV.04.09 revised effective April 1, 2018.

Chapter 10 Specified Digital Products

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35 Miss. Admin. Code Pt. 4, R. 100 Rule 100

The sale, rental or lease of specified digital products is taxed at the regular retail rate when: 1. The sale, rental or lease is to an end user; 2. The seller coveys the right of permanent or less than permanent use of the products transferred electronically; or 3. The sale is conditioned or not conditioned on continued payment.

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

The sale of a digital code that allows the purchaser to obtain a specified digital product is taxed in the same manner as a specified digital product.

35 Miss. Admin. Code Pt. 4, R. 102 Rule 102

“Specified digital products” are electronically transferred digital audio-visual works, digital audio works and digital books. A person is in the business of selling, leasing or renting specified digital products in Mississippi if the product is electronically transferred to a purchaser located in Mississippi. A product is “electronically transferred” when it is obtained by the purchaser by some means other than tangible storage media, including, but not limited to, delivery via internet or network, or access via internet or network to a server where the product is stored, regardless of the location of the server.

35 Miss. Admin. Code Pt. 4, R. 103 Rule 103

Sales by a specified digital products provider to another specified digital products provider for resale are not subject to sales tax, if the provider purchasing the product holds a permit issued under Miss. Code Ann. Section 27-65-27.

35 Miss. Admin. Code Pt. 4, R. 104 Reserved

Chapter 11 Medical Cannabis Establishments

35 Miss. Admin. Code Pt. 4, R. 100 Definitions

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

“Cannabis” means all parts of the plant of the genus cannabis, the flower, the seeds thereof, the resin extracted from any part of the plant, and every compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds or its resin, including whole plant extracts. It does not mean cannabis derived from drug products approved by the federal Food and Drug Administration under Section 505 of the Food, Drug and Cosmetic Act.

35 Miss. Admin. Code Pt. 4, R. 102 Rule 102

“Cannabis products” means cannabis flower, concentrated cannabis, cannabis extracts, and products that are infused with cannabis or an extract thereof and are intended for use or consumption by humans. The term includes, without limitation, edible cannabis products, beverages, topical products, ointments, oils, tinctures and suppositories that contain tetrahydrocannabinol (THC) and/or cannabidiol (CBD) except those products excluded from control under Miss. Code Sections 41-29-113 and 41-29-136.

35 Miss. Admin. Code Pt. 4, R. 103 Rule 103

“Cardholder” is a registered qualifying patient or a registered designated caregiver who has been issued and possesses a valid registry identification card.

35 Miss. Admin. Code Pt. 4, R. 104 Rule 104

“Dispensary” is an entity licensed and registered with the Department of Revenue that acquires, possesses, stores, transfers, sells, supplies, or dispenses medical cannabis,

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cannabis products, equipment used for medical cannabis, or related supplies and educational materials to cardholders.

35 Miss. Admin. Code Pt. 4, R. 105 Rule 105

“Equipment used for medical cannabis” includes pipes, bongs, rolling machines, grinders and similar products. Related supplies include rolling papers, bags, glass container jars, rolling trays and similar products.

35 Miss. Admin. Code Pt. 4, R. 106 Rule 106

"Medical cannabis establishment" means a cannabis cultivation facility, cannabis processing facility, cannabis testing facility, cannabis dispensary, cannabis transportation entity, cannabis disposal entity or cannabis research facility licensed and registered by the appropriate agency.

35 Miss. Admin. Code Pt. 4, R. 107 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 200 Sales of Medical Cannabis

35 Miss. Admin. Code Pt. 4, R. 201 Rule 201

Medical cannabis cultivation facilities may only sell medical cannabis to medical cannabis cultivators, processors or dispensaries registered with the appropriate agencies. A valid resale number and ten-digit medical cannabis license number is required to substantiate a wholesale sale.

35 Miss. Admin. Code Pt. 4, R. 202 Rule 202

Medical cannabis cultivators or medical cannabis processors who transfer medical cannabis to a medical cannabis testing or research facility owe sales tax on the value or cost of the product transferred. The tax liability accrues at the time of transfer and should be remitted to the State with the same return and in the same manner as any other sales tax liability.

35 Miss. Admin. Code Pt. 4, R. 203 Rule 203

Medical cannabis processing facilities may only sell medical cannabis to other registered medical cannabis processors and dispensaries. A valid resale number and ten-digit medical cannabis license number is required to substantiate a wholesale sale.

35 Miss. Admin. Code Pt. 4, R. 204 Rule 204

Medical cannabis dispensaries may only sell medical cannabis, equipment used for medical cannabis, or related supplies and educational materials. Medical cannabis must be obtained from a medical cannabis cultivation facility or processing facility licensed by the Mississippi Department of Health or from another dispensary licensed by the Department of Revenue. These items may only be sold to cardholders or another dispensary licensed by the Department of Revenue. A valid resale number and ten-digit dispensary license is required as documentation of a wholesale sale. All other sales are taxable at the regular retail sales tax rate.

35 Miss. Admin. Code Pt. 4, R. 205 Rule 205

Items that are prohibited from being sold by dispensaries include, but are not limited to, clothing, food that does not contain cannabis, beverages that do not contain cannabis, propane, or vaping products that do not contain cannabis.

35 Miss. Admin. Code Pt. 4, R. 206 Rule 206

Medical cannabis is not subject to sales tax when transferred to a medical cannabis disposal entity licensed by the Mississippi Department of Health.

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35 Miss. Admin. Code Pt. 4, R. 207 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 300 Record Keeping

35 Miss. Admin. Code Pt. 4, R. 301 Rule 301

Each medical cannabis dispensary is required to use the statewide seed-to-sale tracking system maintained by the Mississippi Department of Health. Information entered in the seed-to-sale tracking system shall include each day's beginning inventory, harvests, acquisitions, sales, disbursements, remediations, disposals, transfers, ending inventory, and any other data necessary for inventory control records in the statewide seed-to-sale tracking system.

35 Miss. Admin. Code Pt. 4, R. 302 Rule 302

Adequate records must be maintained to substantiate tax classifications of sales. Adequate records shall include, but is not limited to, itemized invoices for cannabis products purchased, bank statements and cancelled checks, and any/all other sales and/or accounting records. Itemized purchase invoices and tickets shall bear the items purchased, the date of purchase, name of the seller and purchaser. Cash register tapes may not be used in lieu of itemized invoices for record purposes; however, all sales records shall be maintained.

35 Miss. Admin. Code Pt. 4, R. 303 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 400 Payment

35 Miss. Admin. Code Pt. 4, R. 401 Rule 401

Electronic filing of returns will be required through use of the Department’s TAP system. Electronic payment of sales tax will be required unless the medical cannabis establishment has written approval from the Department of Revenue to use another payment method.

35 Miss. Admin. Code Pt. 4, R. 402 (Reserved)

35.IV.04.11 effective June 16, 2022

Subpart 5 Services

Chapter 01 Hotels, Motels, and Mobile Home and Trailer Parks

35 Miss. Admin. Code Pt. 4, R. 100 Levy

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

Miss. Code Ann. Section 27-65-23 levies a tax on the gross income of hotels, motels, tourist courts or camps and trailer parks. Tax is due at the regular retail rate. 102 (Reserved) 200 Definitions 201 “Hotel” or “motel” is defined as any entity or individual engaged in the business of

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furnishing one or more rooms, cottages, or cabins designed for dwelling, lodging, or sleeping purposes to transient persons and that is known to the trade as such. The terms “hotel” or “motel” also include all buildings, including single family dwellings or other structures, kept, used, maintained or advertised as, or held out to the public to be a place where sleeping accommodations are supplied for pay or other consideration regardless of the number of rooms, units, suites, or cabins available. Advertising for rent to the general public, whether by the owner of the property or a third party, qualifies as being “known to the trade as such.” It is immaterial that cooking facilities may or may not be furnished. “Hotel” or “motel” includes any entity or individual furnishing bed and breakfast accommodations to transient persons. “Hotel” also includes third-party entities that facilitate, arrange, or broker transactions by listing or advertising the availability of accommodations for transient persons and, either directly or indirectly through agreements with third parties, collect payment from the customer and transmit such payment to the property owner or manager. It is immaterial whether the property owner or manager would have been required to collect and remit the taxes had the sale not been made through the third-party entity.

35 Miss. Admin. Code Pt. 4, R. 202 Rule 202

“Condominium” or “hotel condominium” is defined as a multi-unit facility where each unit is individually owned. Condominium owners may rent out the units when not in use by the owner. The units may be rented out by the owner or placed with a management company for rental. Rentals of condominiums or hotel condominiums are taxable when such rentals are to transient persons.

35 Miss. Admin. Code Pt. 4, R. 203 Rule 203

“Trailer park” is defined as a park established for the purpose of accommodating travel trailers pulled either by automobiles or other vehicles or self-propelled, which are in a travel or transient status and where utilities are connected in a temporary manner. For tax purposes, a trailer park is any one location where trailers, campers or other mobile units may be parked for a fee, either permanently or temporarily and irrespective of whether utility facilities are available.

35 Miss. Admin. Code Pt. 4, R. 204 Rule 204

“Mobile home park” is defined as a park established for the primary purpose of accommodating mobile homes that are permanently located, registered with the County Tax Assessor as provided by Miss. Code Ann. Section 27-53-5, hooked up to water, sewer, gas, or electric utilities with permanent meter connections that are not easily disconnected, and tied down according to regulations and other requirements. Such facilities are considered a home and place of permanent residence. Since Miss. Code Ann. Section 27-65-23 specifically denotes “hotels, motels, tourist courts or camps and trailer parks," the tax is applicable specifically to travel or transient accommodations and not to residents of mobile homes. Sales to mobile home residents of potable water, electricity, gas or other fuel for residential use are exempt from sales tax.

35 Miss. Admin. Code Pt. 4, R. 205 Rule 205

(Reserved) 300 Gross Income 301 Taxable gross income includes (but is not limited to) receipts from:

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Admissions, minimum and cover charges for entertainment 2. Attrition fees 3. Auto storage – parking lots 4. Banquet meeting room revenue with or without meals 5. Cancellation fees 6. Coin lockers 7. Early departure or late departure fees 8. Guaranteed no show revenue 9. Laundry and valet services 10. Local telephone charges, including per call charges 11. Long distance telephone mark-ups or up-charges, or any excess charges over and above the carrier charge 12. Marina services 13. Packages (example: golf, honeymoon, casino) 14. Pet charges 15. Radios, televisions, and movies, including pay per view services 16. Refrigerator or safe charges 17. Roll away bed charges 18. Sales and rentals of tangible personal property 19. Service charges 20. Transient room revenue 21. Vending machine sales (except full-service vending machines) 22. Video game rentals 302 Non-taxable gross income includes receipts from: 1. Childcare charges (does not include admissions to areas of amusements where children are kept) 2. Coin operated amusement and music machines 3. Commissions included in gross income of other taxpayers 4. Re-billed carrier long distance telephone charges that have been taxed by the service provider 5. Rentals of stores, offices, or other commercial property to non-transient guests

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35 Miss. Admin. Code Pt. 4, R. 303 Rule 303

Any hotel, motel, condominium, or trailer park may exclude the gross income from charges for non-transient guests. 304 For purposes of defining “non-transient guest,” the guest must enter into a written contract or lease at the beginning of the stay for a period of at least three (3) consecutive complete months or for a minimum of ninety (90) consecutive days. Guests who do not enter into a written contract or other written agreement at the beginning of the stay but whose stay ends up exceeding ninety consecutive days are still considered transient guests because there is no agreement concerning the length of stay. Any guest who begins to rent a hotel, motel, condominium, or trailer park space on a daily or weekly basis after the expiration of a written contract or other written agreement and which has not been extended will become a transient guest and the gross income received from the daily or weekly rental will be taxable. 305 Hotel or motel guests qualify as non-transient guests only when they stay in a building(s) held exclusively for long-term rental that is owned by the hotel or motel and is set separate and apart from buildings used to accommodate transient guests. The building set aside for long-term rental must contain rooms with kitchen facilities.

35 Miss. Admin. Code Pt. 4, R. 306 Rule 306

(Reserved) 307 (Reserved) 400 Exempt Sales 401 As a prerequisite to claiming the governmental exemption, the sales of property or service must be sold to, billed directly to, and payment therefore made directly by the governmental entity and not to or through some contractor or quasi-governmental agency, and the title to the property or benefit from the service must pass to the government rather than to some beneficiary. Sales to government employees are taxable regardless of the fact that the employees may be reimbursed by the government for the expenses incurred.

35 Miss. Admin. Code Pt. 4, R. 402 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 500 Purchases

35 Miss. Admin. Code Pt. 4, R. 501 Rule 501

Hotels, motels, condominiums, or condominium hotels must pay tax on purchases that are provided in a guest room as a part of the service of providing lodging. These purchases include items such as shampoo, soap, toilet paper, laundry bags, coffee, food, candy, or other amenities. Tax is also due on purchases of linens, towels, and in-room appliances. Purchases of food or beverage sold by the facility may be made exempt from tax as a wholesale sale. This also includes food or beverage provided to guests in common areas of the hotel that are provided to guests at no additional charge.

35 Miss. Admin. Code Pt. 4, R. 502 Rule 502

Purchases or rentals of supplies and equipment used in the operation of the facility,

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such as furniture, televisions, radios, signs, janitor’s supplies, office supplies, etc., are subject to the regular retail rate of sales or use tax.

35 Miss. Admin. Code Pt. 4, R. 503 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 504 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 600 Reporting Requirements

35 Miss. Admin. Code Pt. 4, R. 601 Rule 601

Adequate records must be maintained to substantiate tax classifications of sales and purchases.

35 Miss. Admin. Code Pt. 4, R. 602 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 700 Local and Private Levies

35 Miss. Admin. Code Pt. 4, R. 701 Rule 701

Additional local levies may be applicable to hotels and motels depending upon where they are located in this state. The local tax must be invoiced and collected as a separate levy and should be reported on a return using the appropriate rate code. Rate codes are assigned based on the percentage of tax due.

35 Miss. Admin. Code Pt. 4, R. 702 Rule 702

The local levy may be due on the same basis as the sales tax, or the basis may exclude specific items that are subject to the regular sales tax such as food, beverage, telephone, laundry, and room rentals for day meetings.

35 Miss. Admin. Code Pt. 4, R. 703 (Reserved)

35.IV.5.01 revised effective August 8, 2025

Chapter 02 Laundries, Dry Cleaners and Linen Rental Companies

35 Miss. Admin. Code Pt. 4, R. 100 Rule 100

Miss. Code Ann. Section 27-65-23, levies a tax at the regular retail rate on the gross income of persons operating a laundry, cleaning, dyeing or pressing shop. No deduction is allowable for commissions or fees paid to agents soliciting this business. Miss. Code Ann. Section 27-65-101(o) exempts the gross collections from self-service commercial laundering, drying, cleaning and pressing equipment.

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

Income received from renting linens, uniforms and other tangible personal property in Mississippi is taxable at the regular retail rate of tax. No sales or use tax is due on property purchased by licensed linen rental companies or laundries for rental.

35 Miss. Admin. Code Pt. 4, R. 102 Rule 102

Income received from laundering or cleaning services for out-of-state customers is exempt when the property on which the service was performed is delivered to the customer either by common carrier or in property owned by the vendor.

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35 Miss. Admin. Code Pt. 4, R. 103 Rule 103

Charges for alteration services are taxable when they are performed as a part of a laundering or cleaning activity.

35 Miss. Admin. Code Pt. 4, R. 104 Rule 104

Services, such as fading or dyeing, performed for a licensed dealer on property for resale at retail are exempt from sales tax.

35 Miss. Admin. Code Pt. 4, R. 105 Rule 105

Purchases by or sales to licensed laundries, dry cleaners and linen rental companies of water, soap and bleach dispensers, coin changers, air conditioners, bulk heads, signs and advertising, office supplies, labels, tickets, etc., which are used or consumed in the rendering of the services are taxable at the regular retail rate of sales or use tax. Purchases of soaps, naphthas, dyes and cleaning fluids are considered process chemicals and are exempt from tax. Purchases of coat hangers, wrapping paper, bags, etc., are exempt from sales tax.

35 Miss. Admin. Code Pt. 4, R. 106 Rule 106

Sales of electric power or other fuels to laundries, dry cleaners and linen rental companies for plant use are exempt from sales tax. See Title 35 Miss. Admin. Code, Part IV, Subpart 6, Chapter 01 concerning the Affidavit for Utility Exemption. Sales of manufacturing or processing machinery or machine parts to these establishments are taxable at the 1½% special rate of tax.

35 Miss. Admin. Code Pt. 4, R. 107 Rule 107

Sales of processing machinery, machine parts, soaps, supplies, etc., to hotels, taxable hospitals, taxable rest homes, etc., for their own use are taxable at the regular retail rate of tax. All sales (equipment, power, supplies, etc.) to persons in the self-service laundering business are taxable at the regular retail rate of tax.

35 Miss. Admin. Code Pt. 4, R. 108 Rule 108

Rental or lease of tangible personal property is taxable at the same rate as sales of the same property.

35 Miss. Admin. Code Pt. 4, R. 109 Rule 109

Adequate records must be maintained to substantiate tax classifications of sales and purchases.

35 Miss. Admin. Code Pt. 4, R. 110 (Reserved)

35.IV.5.02 revised effective August 3, 2019

Chapter 03 Renting or Leasing Tangible Personal Property

35 Miss. Admin. Code Pt. 4, R. 100 General

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

Miss. Code Ann. Section 27-65-23 taxes the gross income received from renting or leasing personal property used in this state. The tax due on the lease or rental is at the same rate as the sale of the property.

35 Miss. Admin. Code Pt. 4, R. 102 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 200 Definitions

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35 Miss. Admin. Code Pt. 4, R. 201 Rule 201

Rental or Lease means any transfer of possession or control of tangible personal property for a fixed or indeterminate term for consideration. This definition shall be used for sales and use tax purposes regardless if a transaction is characterized as a lease or rental under generally accepted accounting principles, the Internal Revenue Code, the Mississippi Code of 1972, or other provisions of the federal, state or local law.

35 Miss. Admin. Code Pt. 4, R. 202 Rule 202

Lease or rental does not include providing tangible personal property furnished with an operator or crew for its operation. An operator or crew must do more than maintain, inspect or set-up the property. Under these circumstances, a service is rendered other than leasing or renting of property.

35 Miss. Admin. Code Pt. 4, R. 203 Rule 203

Miss. Code Ann. Section 27-65-3 (i) defines gross income to include the total charge for service or the total receipts derived from the rental or lease of tangible personal property without any deduction for rebates, cost of property sold, cost of materials used, labor costs, interest paid, losses or any expense whatever. Gross income also includes any charges made to the lessee for damages to, loss of or excessive use of the property.

35 Miss. Admin. Code Pt. 4, R. 204 Rule 204

Charges to lessees which represent a recovery of expenses (repairs, transportation, hotel, meals, supplies, etc.) are in reality an allocation of the selling price to this cost of operation and cannot be excluded from the measure of tax imposed upon the gross income.

35 Miss. Admin. Code Pt. 4, R. 205 Rule 205

Rentals for re-rental by a lessor engaging in the renting or leasing business are wholesale sales and are not considered to be taxable income.

35 Miss. Admin. Code Pt. 4, R. 206 Rule 206

Motor Vehicle is defined as any self-propelled, wheeled conveyance that does not run on rails. The term includes all private carriers of passengers and any light carriers of property having a gross vehicle weight of 10,000 pounds or less.

35 Miss. Admin. Code Pt. 4, R. 207 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 300 Purchases and Sales

35 Miss. Admin. Code Pt. 4, R. 301 Rule 301

Persons qualified to do business in this State of renting or leasing tangible personal property are considered retailers and may purchase property to be rented exempt from sales or use tax. The tax, likewise, shall not apply to repair and repair parts of such property.

35 Miss. Admin. Code Pt. 4, R. 302 Rule 302

Leasing companies may purchase tangible personal property from a customer to be leased back to the same customer as a financing tool to benefit the customer. However, if the condition of the property has been altered or if the customer has used the property since the time it was originally purchased by the customer, there will be no credit for sales or use tax paid by the customer when originally procured prior to the sale to the leasing company.

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35 Miss. Admin. Code Pt. 4, R. 303 Rule 303

All purchases of tools, supplies, machinery and equipment which are purchased for use in operating the business and not for rental are taxable at the regular retail rate of sales or use tax.

35 Miss. Admin. Code Pt. 4, R. 304 Rule 304

Sales of property to consumers which has been rented or leased are considered to be retail sales and are taxable on the gross proceeds of such sales.

35 Miss. Admin. Code Pt. 4, R. 305 Rule 305

Owners or other persons receiving benefit from use of tangible personal property in this State are liable for use tax on the property.

35 Miss. Admin. Code Pt. 4, R. 306 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 400 Tax on Motor Vehicle Rentals

35 Miss. Admin. Code Pt. 4, R. 401 Rule 401

In addition to the 5% sales tax due on the rental of motor vehicles, a 6% motor vehicle rental tax is due on the gross income from the short term rental of motor vehicles. Therefore, the total tax due on short term rentals of these motor vehicles is 11%. Short term rentals are defined as rental agreements with a term of 30 or less continuous days. The total tax due on the long term (rental agreements in excess of 30 continuous days) rental or leasing of motor vehicles is 5%.

35 Miss. Admin. Code Pt. 4, R. 402 Rule 402

Effective July 1, 2014, as provided by Miss. Code Ann. Section 27-65-101 (1)(ss), the income received from renting or leasing of truck-tractors and semi-trailers used in interstate commerce and registered under the International Registration Plan (IRP) or any similar reciprocity agreement or compact relating to the proportional registration of commercial vehicles, as provided by Miss. Code Ann. Section 27-19-143, is exempt . Similar vehicles not used in interstate commerce and not registered in such a plan are taxed at the special rate of 3% provided for truck-tractors and semi-trailers, under Miss. Code Ann. Section 27-65-17(1)(d).

35 Miss. Admin. Code Pt. 4, R. 403 Rule 403

The total amount charged for rental of “you-drive-it” or “you-haul-it” vehicles is taxable income to the lessor, even though the lessee may use the property in multiple cities in Mississippi or in other states, and even though the charge may be collected by or with another person. The tax rate on these vehicles is 3% for vehicles with a gross vehicle weight (GVW) in excess of 10,000 pounds. Vehicles with a GVW of 10,000 pounds or less are subject to tax at the rate of 5% for sales tax and the additional 6% motor vehicle rental tax.

35 Miss. Admin. Code Pt. 4, R. 404 Rule 404

Motor fuel charges are not considered to be taxable rental income when separately invoiced from the charge for rental or lease. Sales of motor fuel by lessor are not subject to sales tax.

35 Miss. Admin. Code Pt. 4, R. 405 Rule 405

Rental cars provided under a new car warranty either from a dealer’s own fleet or through a car rental agency are considered part of the warranty repair and not subject to sales tax or the motor vehicle rental tax.

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35 Miss. Admin. Code Pt. 4, R. 406 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 500 Reporting Requirements

35 Miss. Admin. Code Pt. 4, R. 501 Rule 501

Adequate records must be maintained to substantiate tax classifications of sales and purchases.

35 Miss. Admin. Code Pt. 4, R. 502 Rule 502

Income received from the rental or lease of transportation equipment between cities and counties in this state is not subject to city diversion. Any business renting or leasing transportation equipment and other items of tangible personal property must report the income from these activities separately.

35 Miss. Admin. Code Pt. 4, R. 503 (Reserved)

Chapter 04 Termite and Pest Control Services

35 Miss. Admin. Code Pt. 4, R. 100 Rule 100

Every person engaged in the business of performing termite and pest control services is liable for the regular retail rate of sales tax on gross income as provided in Miss. Code Ann. Section 27-65-23.

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

Gross income received in connection with these services includes charges for the treatment or prevention of termites, insects, rodents or other pests. Gross income includes the replacement of flooring, sills or other damaged portions of a building resulting from an infestation. Gross income also includes additional fees charged on an annual, semi-annual or other basis and labeled in some instances as inspection fees or continuation charges.

35 Miss. Admin. Code Pt. 4, R. 102 Rule 102

The exemption provided in Miss. Code Ann. Section 27-65-103(a) (“Sales of...insecticides...used in growing and preparing agricultural products for market”) does not apply to sales of termite or pest control services or to sales of insecticides, rat poison and other materials for the control or prevention of rodents, insects, and other pests encountered outside the field of agriculture. The regular retail sales tax applies unless such materials are actually used in growing agricultural products for market such as cotton poison for boll weevils. The fumigation of products (beans, grain, etc.), while in storage is a taxable pest control service.

35 Miss. Admin. Code Pt. 4, R. 103 Rule 103

Purchases of building materials (lumber, nails, etc.) to repair damaged portions of a building resulting from infestation and materials (insecticides, pesticides, poison, distillate used in preparing preventive compounds, etc.) for treating are exempt from sales tax when purchased by a termite or pest control business.

35 Miss. Admin. Code Pt. 4, R. 104 Rule 104

Supply items and tools and/or equipment such as, spray applicators, dispensers, animal traps, etc., used in, but not actually resold as a part of the treatment or repair work are taxable at the regular retail rate of tax at the time of purchase.

35 Miss. Admin. Code Pt. 4, R. 105 (Reserved)

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35.IV.5.04 revised effective March 6, 2020

Chapter 05 Public Storage Warehouse

35 Miss. Admin. Code Pt. 4, R. 100 Storage Warehouses

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

A storage warehouse is a place where tangible personal property is kept and stored for a fee in the custody of a person operating a commercial business. The gross income received from such an activity is taxable at the regular retail rate of sales tax. Income received from storage and handling of perishable goods is exempt from tax. "Perishable goods" means frozen goods or goods that require refrigeration while stored in a public storage warehouse (example: meat, fish, poultry, vegetables, fruits, etc.). Perishable goods shall also include grain products that require aeration while stored in a public storage warehouse (example: soybeans, wheat, rice, oats, milo, etc.).

35 Miss. Admin. Code Pt. 4, R. 102 Rule 102

Income received from the temporary storage of tangible personal property in this state pending shipping or mailing of the property outside this state is exempt from tax. The exemption is available to all property whether or not the final determination of the property’s destination can be made prior to storage. It is the responsibility of the owner of the storage facility to obtain a signed Affidavit of Temporary Storage from each customer annually. The Affidavit is completed by the customer to indicate what percentage of goods will be shipped out of state. The percentage should be based on prior year’s shipments, however, a reasonable estimate may be used if there is an absence of prior year information. Any Affidavit accepted in good faith will be accepted as satisfactory documentation of exempt sales. Sales tax is due on any goods to be shipped within this state.

35 Miss. Admin. Code Pt. 4, R. 103 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 200 Rental of Storage Facilities

35 Miss. Admin. Code Pt. 4, R. 201 Rule 201

Income received from the rental of storage facilities for the storage of tangible personal property is exempt when the lessee maintains exclusive access to and control of the storage facility. Example: mini storage facilities where the lessee uses their personal lock. Income received from common storage facilities are subject to sales tax when multiple lessees have access to the same area of the storage facility.

35 Miss. Admin. Code Pt. 4, R. 202 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 300 Moving and Storage Companies

35 Miss. Admin. Code Pt. 4, R. 301 Rule 301

Purchases of equipment and supplies by a warehouse and drayage or moving business are taxable at the regular retail rate of sales or use tax. Persons engaged in the moving and storage business are considered to be consumers of packaging materials on which the customer's property is contained for storage or transportation.

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35 Miss. Admin. Code Pt. 4, R. 302 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 400 Fuel Terminals

35 Miss. Admin. Code Pt. 4, R. 401 Rule 401

Persons in the business of storing or warehousing fuel or other oil products for others are construed to be engaged in a taxable public warehouse activity. The method used in measuring charges and length of time that product remains in the terminal does not relieve such persons of the sales tax liability.

35 Miss. Admin. Code Pt. 4, R. 402 Rule 402

Income received from the temporary storage of fuel or other fuel products in this state pending shipping or mailing of the property outside this state is exempt from tax. The exemption is available whether or not the final determination of the property’s destination can be made prior to storage. It is the responsibility of the owner of the fuel terminal to obtain a signed Affidavit of Temporary Storage from each customer annually. The Affidavit is completed by the customer to indicate what percentage of goods will be shipped out of state. The percentage should be based on prior year’s shipments, however, a reasonable estimate may be used if there is an absence of prior year information. Any Affidavit accepted in good faith will be accepted as satisfactory documentation of exempt sales. Sales tax is due on any goods to be shipped within this state. The storage and handling of natural gas in underground salt domes, caverns, or other underground structures are exempt.

35 Miss. Admin. Code Pt. 4, R. 403 (Reserved)

35.IV.5.05 revised effective September 1, 2018

Chapter 06 Computer Equipment and Services

35 Miss. Admin. Code Pt. 4, R. 100 Rule 100

Computer Hardware 1. “Computer Hardware” includes the components, accessories, machinery and equipment which constitute the physical computer assembly and the internalized instruction code which controls the basic operations (i.e. arithmetic and logic) of the computer and which causes the computer to execute instructions contained in system programs. 2. Rate and Application of Tax Sales, leases, or rentals of computer hardware, parts, supplies, publications or other tangible personal property are taxable at the regular retail rate of sales or use tax unless otherwise exempt.

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

Computer Program and Software 1. a. "Computer Program" is a series of instructions that are coded for acceptance or use by a computer system which are designed to permit the computer system to process data and provide results and information. The series of instruction may be contained in or on magnetic tapes, printed instructions, or other tangible or electronic media or downloaded via the Internet. This definition includes computer

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game cartridges which allow certain games to be played on a television set through interaction with a computer or on home computers. b. “Computer Software” is a collection of computer programs which work in cooperation with one another to perform automated tasks. 2. Rate and Application of the Tax a. The gross income received from computer program or software sales and services is taxable at the regular retail rate of sales tax. Computer program license fees (one- time or annual) and/or maintenance contract income are taxable regardless of how billed. Taxable services also include the design and creation of a web page regardless of the location of the hosting server. b. The principal line of business of the seller is not material when determining the taxability of sales of computer programs or software. Any bank, savings and loan or other thrift institution, accounting firm, computer program developer, dealer or other person is deemed to be a retailer when selling computer programs or software at retail to the final user or consumer.

35 Miss. Admin. Code Pt. 4, R. 102 (Reserved)

Professional Services

35 Miss. Admin. Code Pt. 4, R. 200 Rule 200

Professional Services. Professional services directly related to the technical design and programming of computer software are taxable and are included in gross taxable income.

35 Miss. Admin. Code Pt. 4, R. 201 Rule 201

Taxable professional services include but are not limited to: 1. Charges for installing, configuring, debugging, modifying, testing, or troubleshooting computer hardware, networks, programs or software, are taxable regardless of how such charges are billed. 2. The recovery of damaged, deleted, or lost data or other services using ARCserve or Norton PC Tools or other similar computer programs or software. 3. The initial charges for the training of user personnel or telephone support connected with the sale of computer hardware, programs, or software, are taxable regardless of when or where the services are provided.

35 Miss. Admin. Code Pt. 4, R. 202 Rule 202

Non-Taxable professional services include but are not limited to: 1. Identifying management information needs. 2. Analyzing business policies and conceptual design of new procedures. 3. Accounting and legal services such as advice on tax matters, assets management, budgetary matters, quality control, information security, operational and financial statements, auditing and any other situation where the service provider receives data or information and studies, alters, analyzes, interprets or adjusts such material. 4. Feasibility studies including economic and technical analysis of existing or potential computer hardware or software needs and alternatives. 5. Word processing, data entry, data retrieval, data search, information compilation, payroll and business accounting data production, and other computerized data and information storage or manipulation services are not taxable. This also includes charges for computer time used in providing these services.

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35 Miss. Admin. Code Pt. 4, R. 203 Rule 203

However, when any of these services or other professional services is incidental to the sale of computer hardware, software, or programs, the entire charge is taxable.

35 Miss. Admin. Code Pt. 4, R. 204 (Reserved)

Use Tax

35 Miss. Admin. Code Pt. 4, R. 300 Rule 300

Use Tax. Section 27-67-3(i), defines computer software programs as tangible personal property for use tax purposes. The regular rate of use tax is due and payable from every person using, storing, or consuming such property within this state, possession of which is acquired in any manner. However, software maintained on a server located outside the state and accessible for use only via the Internet is not taxable.

35 Miss. Admin. Code Pt. 4, R. 301 (Reserved)

Wholesale Sales

35 Miss. Admin. Code Pt. 4, R. 400 Rule 400

Wholesale Sales. Sales of tangible personal property and services to a licensed retailer for resale in the regular line of business are not taxable.

35 Miss. Admin. Code Pt. 4, R. 401 (Reserved)

Purchases

35 Miss. Admin. Code Pt. 4, R. 500 Rule 500

Purchases. Purchases or rental of equipment and purchases of supplies used by a vendor in providing services to a user are taxable.

35 Miss. Admin. Code Pt. 4, R. 501 (Reserved)

Reporting Requirements

35 Miss. Admin. Code Pt. 4, R. 600 Rule 600

Adequate records must be maintained to substantiate tax classifications of sales and purchases.

35 Miss. Admin. Code Pt. 4, R. 601 (Reserved)

Chapter 07 Design, Engineering and Other Professional Services

35 Miss. Admin. Code Pt. 4, R. 100 Rule 100

Design, engineering and other professional services are exempt from tax when not related to sales of tangible personal property taxable by Miss. Code Ann. Section 27-65-17, services taxable by Miss. Code Ann. Section 27-65-23 or activities taxable by Miss. Code Ann. Sections 27-65-21 and 27-65-24.

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

Sales of tangible personal property are taxed by Miss. Code Ann. Section 27-65-17 on the total gross proceeds of sales. Sales of certain services are taxed by Miss. Code Ann.

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Section 27-65-23 on gross income. Gross proceeds of sales include, but are not limited to, design, engineering and other professional services utilized in or related to the sale, manufacture and/or installation of tangible personal property when the service is billed by the seller, regardless of the method billed. Gross income also includes income received from design, engineering and other professional services utilized in or related to performing a taxable service under Miss. Code Ann. Section 27-65-23.

35 Miss. Admin. Code Pt. 4, R. 102 Rule 102

Contracts or activities subject to the tax levied by Miss. Code Ann. Sections 27-65-21 and 27-65-24 are taxable on the total contract price or compensation received from such contract or activity. However, if the contract price for a project exceeds the sum of one hundred million dollars ($100,000,000.00), the portion of the total contract price attributable to design or engineering services shall be excluded from the basis of the contract price for purposes of determining tax due.

35 Miss. Admin. Code Pt. 4, R. 103 Rule 103

For contracts or activities subject to the tax levied by Miss. Code Ann. Section 27-65-21, the portion of the contract for engineering services may be excluded from the total contract price if the engineering services are performed by a professional engineer as defined in Miss. Code Ann. Section 73-13-3, who is also the general or prime contractor on the contract.

35 Miss. Admin. Code Pt. 4, R. 104 Rule 104

If there is no written contract, the contract will be deemed to be entered into at the time work begins.

35 Miss. Admin. Code Pt. 4, R. 105 Rule 105

Records must be maintained to substantiate the exclusion of design or engineering services from contracts subject to contractor’s tax.

35 Miss. Admin. Code Pt. 4, R. 106 (Reserved)

35.IV.5.07 revised effective March 6, 2020

Chapter 08 Grading, Ditching, Dredging or Landscaping

35 Miss. Admin. Code Pt. 4, R. 100 Levy

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

Pursuant to Miss. Code Ann. Section 27-65-23, persons engaged in the business of performing services of grading, excavating, ditching, dredging, or landscaping are liable for sales tax at the regular rate of tax on gross income except as otherwise provided.

35 Miss. Admin. Code Pt. 4, R. 102 Rule 102

The total compensation received from grading, excavating, ditching, dredging, or landscaping activities performed as a prime contractor, for commercial purposes and exceeding $10,000.00 is subject to the contractor’s tax provided for in Miss. Code Ann. Section 27-65-21.

35 Miss. Admin. Code Pt. 4, R. 103 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 200 Definitions

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35 Miss. Admin. Code Pt. 4, R. 201 Rule 201

Grading means any activity where an improvement is made to a road, land surface, or other job site such as, but not limited to, the grading of streets, highways, foundation pads, commercial projects, and building lots. Grading also includes the terracing of land, land leveling and land forming for farm, commercial, industrial, or residential purposes. Grading does not include land clearing and grubbing services when these services are not performed in conjunction with any other taxable services such as those activities listed above.

35 Miss. Admin. Code Pt. 4, R. 202 Rule 202

Excavating means any activity where something is created through excavation such as, but not limited to, a swimming pool, basement for a building, pond, underground storage silo, or other similar or related facility.

35 Miss. Admin. Code Pt. 4, R. 203 Rule 203

Ditching embraces any activity where a trench, furrow, canal, dredge ditch, or irrigation canal is made or constructed for irrigation, drainage or a boundary line, but is not limited to these activities.

35 Miss. Admin. Code Pt. 4, R. 204 Rule 204

Dredging means any activity of constructing, repairing, improving, or removing sediment from any ditch, irrigation canal, navigation channel, trench, drainage ditch, or any other body of water.

35 Miss. Admin. Code Pt. 4, R. 205 Rule 205

Landscaping means any activity that modifies the grounds of any house, building or area of land by contouring, forming or functional alteration of the land and includes the planting of flowers, shrubs or trees and the establishment of lawns and gardens. Landscaping also includes the building of landforms, retaining walls, flower beds, water features and other similar structures. Landscaping does not include tree trimming, grass cutting, hedge trimming, or similar maintenance activities; nor does it include the planting or spreading of materials provided by the owner when the charges for the non-taxable activities are listed separately on the invoice given to the customer.

35 Miss. Admin. Code Pt. 4, R. 206 Rule 206

Agricultural or soil erosion activities include items such as terracing, land leveling for purposes of growing crops, preparation of pasture land, creation or deepening of farm ponds, irrigation or drainage ditches, and other similar activities where the purpose of such activity is to improve land where crops are grown or where livestock is allowed to roam or graze. Agricultural or soil erosion activities do not include activities which are part of a commercial construction activity such as the building or improving of poultry houses, barns, sheds, roads, foundation pads or other similar structures.

35 Miss. Admin. Code Pt. 4, R. 207 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 300 Taxability

35 Miss. Admin. Code Pt. 4, R. 301 Rule 301

Sales tax is not due on contracts entered into with farmers for the clearing of trees and underbrush when the principle activity contracted for is for land clearing. Contracts that principally involve grading, excavating, ditching, dredging, or landscaping are subject to tax unless such activity is exempted under Miss. Code Ann. Section 27-65-103 (d).

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35 Miss. Admin. Code Pt. 4, R. 302 Rule 302

Miss. Code Ann. Section 27-65-103 (d) exempts gross income from grading, excavating, ditching, dredging or landscaping activities performed for a farmer on a farm for agricultural or soil erosion purposes when such income does not exceed $10,000.00. Contracts in excess of $10,000.00 for grading, excavating, ditching, dredging or landscaping services are taxable even when the payment for such activities is paid for in full or in part by the United States, State of Mississippi, or other governmental entity, or when the landowner is reimbursed in full or in part by a governmental entity.

35 Miss. Admin. Code Pt. 4, R. 303 Rule 303

No sales tax is due on a contract to fill in a hole, trench, ditch or other cavity in the earth where the principle activity performed is the transportation of fill dirt to the job site, the service of compacting and leveling being an inconsequential element of the transaction, even though the total compensation received is in excess of $10,000.00. If, on the other hand, the principal activity performed is the grading or land forming of the job site with the service of removing excess dirt or placement of fill dirt being an inconsequential element of the transaction, sales tax or contractor's tax is due on the total compensation received.

35 Miss. Admin. Code Pt. 4, R. 304 Rule 304

Compensation received from the drilling and installation of the well for an irrigation system is taxable for contractor’s tax when the income exceeds $10,000.00.

35 Miss. Admin. Code Pt. 4, R. 305 Rule 305

The activities of a person engaged in the stripping of top soil or the mining, loading, and hauling of a natural resource product are not grading or excavating within the scope of Miss. Code Ann. Section 27-65-23 and as such is not subject to sales or contractor's tax.

35 Miss. Admin. Code Pt. 4, R. 306 Rule 306

Contracts for remediation or excavation and removal of contaminated soil for environmental purposes are subject to sales or contractor's tax.

35 Miss. Admin. Code Pt. 4, R. 307 (Reserved)

35.IV.05.03 revised effective July 1, 2009

Chapter 09 Car Washes

Levy

35 Miss. Admin. Code Pt. 4, R. 100 Rule 100

Section 27-65-23 of the Mississippi sales tax law taxes car washing with an exemption provided in Section 27-65-111(x) for self-service, coin operated car washes and car washes performed using portable high pressure washing equipment when the service is performed on the premises of the customer.

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

Self service, coin operated car washes where the customer deposits money for the car wash are exempt. This includes self-service bays where the customer washes his own vehicle or where the vehicle is washed by automatic wash equipment. Automatic car wash bays located at facilities such as convenience stores, gas stations and oil change facilities are considered to be self-service, coin operated car washes and are exempt. In order for a car

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wash facility to be exempt, the facilities’ employees cannot provide any assistance in the washing, drying or detailing of the automobile. Manual car washes, detail shops, and those with a mixture of manual and automatic services are subject to tax at the regular retail rate.

35 Miss. Admin. Code Pt. 4, R. 102 (Reserved)

Purchases

35 Miss. Admin. Code Pt. 4, R. 200 Rule 200

Exempt car washes must pay tax on any supply items such as soap, wax, water, or any other items dispensed through the washing equipment. The car wash operator should also pay tax on the purchase of items sold through vending equipment located on the premises.

35 Miss. Admin. Code Pt. 4, R. 201 Rule 201

Car wash facilities whose services are taxable may buy items exempt from tax if they remain with the car, such as wax. Purchases of supplies that are used or consumed by the car wash in performing its service are taxable. These include items such as soap, water, tire cleaner, and rags.

35 Miss. Admin. Code Pt. 4, R. 202 (Reserved)

Sub Part 06 Utilities

Chapter 01 Electric Power, Light, Gas and Other Fuel Distributors

35 Miss. Admin. Code Pt. 4, R. 100 Levy

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

Pursuant to Miss. Code Ann. Section 27-65-19(1)(a), sales to consumers of electricity, natural gas, liquefied petroleum gas or other fuels and services related thereto by electric power associations, natural gas districts, municipalities, privately owned businesses or stock companies, or any other persons are taxable on the gross income of the business at the regular retail rate of sales tax, except as otherwise provided. These sales are exempt when sold for residential heating, lighting, or other residential, noncommercial, nonagricultural use.

35 Miss. Admin. Code Pt. 4, R. 102 Rule 102

Pursuant to Miss. Code Ann. Section 27-65-19(1)(b)(ii), sales of electricity, current, power, steam, coal, natural gas, liquefied petroleum gas or other fuel sold to a producer of oil and gas for use directly in enhanced oil recovery using carbon dioxide and/or the permanent sequestration of carbon dioxide in a geological formation is taxable at the reduced 1 ½% rate.

35 Miss. Admin. Code Pt. 4, R. 103 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 200 Residential Usage

35 Miss. Admin. Code Pt. 4, R. 201 Rule 201

In order to qualify for the residential exemption, the utilities must be sold to, billed to, and paid for by the homeowner or resident of the facility. Residential customers may include,

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but are not limited to, privately owned hunting and fishing camps, summer homes, cabins, or apartments.

35 Miss. Admin. Code Pt. 4, R. 202 Rule 202

Hunting or fishing camps that provide hunts and/or accommodations for a fee are not allowed the residential exemption and are subject to the regular retail rate of tax. Vacant apartments with utilities being billed to the apartment complex or manager are not eligible for the residential exemption. Private homes or residences owned by a business or corporation that are used for commercial purposes and that may be used to provide overnight stay on a temporary or transient basis are subject to the regular retail rate of tax. Such common establishments include bed & breakfast facilities.

35 Miss. Admin. Code Pt. 4, R. 203 Rule 203

Apartments rented to non-transient customers where utilities are sold to, billed to and paid for by the apartment owner are eligible for the residential exemption as long as the utilities are separately metered between residential and commercial use.

35 Miss. Admin. Code Pt. 4, R. 204 Rule 204

Any apartment or home that has mixed usage (residential/commercial) must be taxed at the regular retail rate unless there is a separate meter for the business (ex. business shop, poultry farm, commercial barn, repair garage, etc.). This provision does not include homes that also contain a home office.

35 Miss. Admin. Code Pt. 4, R. 205 Rule 205

Charges billed to an apartment owner or homeowner’s association for commercial use in common areas such as, but not limited to, street lighting, subdivision entrance lights, swimming pools, recreational facilities, leasing offices, clubhouses and irrigation sprinkler systems are not residential usage and are taxable at the regular retail rate of tax.

35 Miss. Admin. Code Pt. 4, R. 206 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 300 Exemptions

35 Miss. Admin. Code Pt. 4, R. 301 Rule 301

Sales of electricity, natural gas, liquefied petroleum gas or other fuels and services are not subject to sales tax when sold to a qualified exempt organization described in Mississippi statute.

35 Miss. Admin. Code Pt. 4, R. 302 Rule 302

Pursuant to Miss. Code Ann. Section 27-65-19(1)(a)(ii), sales of electricity, current, power, natural gas, liquefied petroleum gas or other fuel for heating, lighting, or other use, and sales of potable water to a church exempt from federal income taxation under 26 USCS Section 501(c)(3) shall be excluded from taxable gross income of the business if the exempt sales are utilized on property that is primarily used for religious or educational purposes. Any church purchasing the above utilities may sign an affidavit attesting to the fact that they are exempt from federal taxation and that they qualify to be exempt from sales tax. Utility providers can accept this affidavit or the 501(c)(3) certificate from the Internal Revenue Service as evidence that the church qualifies for the exemption.

35 Miss. Admin. Code Pt. 4, R. 303 Rule 303

Pursuant to Miss. Code Ann. Section 27-65-107(f), sales of fuel to a manufacturer, custom processor, public service company or technology intensive enterprise meeting the criteria

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established by the Mississippi Development Authority provided for in Section 27-65- 17(1)(f) when used for industrial purposes are exempt from the tax levy.

35 Miss. Admin. Code Pt. 4, R. 303.01 Rule 303.01

A manufacturer holding a valid direct pay permit must provide their direct pay permit to its utility providers. The manufacturer will not be charged any tax by the utility provider but will be responsible for remitting the correct retail rate of tax for any non-industrial usage directly to the Department of Revenue on their Use Tax return. The direct pay permit should be used for all utility purchases including electricity, gas, and water. Any business eligible for the exemption that does not hold a direct pay permit must complete the Affidavit for Utility Exemption found on the Department’s website and provide a copy to the utility company. Utility companies must keep their customers direct pay permit or affidavit as documentation in order to sell fuel for non-residential purposes exempt.

35 Miss. Admin. Code Pt. 4, R. 303.02 Rule 303.02

The exemption is applicable to certain businesses, such as a manufacturer, but is also applicable to certain specific uses, such as cotton ginning. The following provides some examples of the types of businesses or the types of special usage that qualify for the exemption. 1. Commercial Bakeries 2. Shipbuilders 3. Soft drink bottlers 4. Poultry brooders, incubators and hatcheries 5. Cold storage processors 6. Commercial horticulturists and greenhouses 7. Pipeline compressor or pumping stations 8. Cotton compresses and gins 9. Creosoting and treating plants 10. Dairy barns 11. Electricity generating plants 12. Electric power sub-stations 13. Feed mixers and processors 14. Agricultural irrigation 15. Garment plants 16. Concrete and asphalt plants 17. Laundries and dry cleaners 18. Custom meat processors 19. Milk processors 20. Printing shops 21. Sawmills 22. Steel fabricators

35 Miss. Admin. Code Pt. 4, R. 304 Rule 304

The sales of fuel used in the production of electric power by a company primarily engaged in the business of producing, generating, or distributing electric power for sale are exempt from tax, pursuant to Miss. Code Ann. Section 27-65-107(e).

35 Miss. Admin. Code Pt. 4, R. 305 Rule 305

Pursuant to Miss. Code Ann. Sections 27-65-107(g) and (h) the exemption also applies to agricultural use which includes the sale of fuels to or used directly in:

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Commercial fishermen 2. Shrimper or oystermen 3. The production of poultry or poultry products 4. The production of livestock and livestock products 5. The production of domesticated fish and domesticated fish products 6. The production of marine aquaculture products 7. The production of plants or food by commercial horticulturists 8. The processing of milk and milk products 9. The processing of poultry and livestock feed 10. The irrigation of farm crops.

35 Miss. Admin. Code Pt. 4, R. 306 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 400 Natural and Byproduct Gases

35 Miss. Admin. Code Pt. 4, R. 401 Rule 401

Pursuant to Miss. Code Ann. Section 27-65-19(1)(b)(i) sales of carbon dioxide, either naturally occurring or man-made, are subject to a reduced 1½% rate when purchased for use in a carbon dioxide enhanced oil recovery operation or for permanent storage in the ground. 402 Miss. Code Ann. Section 27-65-101(1)(n) provides that the value of natural gas lawfully injected into the earth for cycling, repressuring or lifting of oil, or lawfully vented or flared in connection with the production of oil is exempt from sales tax. However, the sale of natural gas for non-industrial use, non-residential use, is taxable at the regular retail rate except as provided in Section 401. 403 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 500 Taxability of Other Income

35 Miss. Admin. Code Pt. 4, R. 501 Rule 501

All receipts from customers which are not refundable, or which are not investments in a marketable equity are included in gross income, taxable at the appropriate rate applicable to the customer. Examples are: 1. Connection or reconnection charges 2. Contributions to line extensions or relocations (aid to construction) 3. Forfeited membership deposits 4. Membership fees and deposits (non-refundable) 5. Sales of electricity, gas and other fuel 6. Service calls on property of customer (meter test, etc.)

35 Miss. Admin. Code Pt. 4, R. 502 Rule 502

Contributions to line extensions or relocations (aid to construction) made during construction of a residence when billed to the contractor are taxable at the regular retail rate. All charges billed to the homeowner are residential and exempt. Utilities billed to a contractor for temporary use during construction are taxable at the regular retail rate.

35 Miss. Admin. Code Pt. 4, R. 503 Rule 503

Sales of appliances and the installation or servicing thereof, as well as sales of any other merchandise to residential consumers are taxable at the regular retail rate of tax. This includes accommodation sales and sales to employees.

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35 Miss. Admin. Code Pt. 4, R. 504 Rule 504

All receipts for the use of electric charging stations including fees for electricity, charging time, idle time, and any other fees are taxable at the regular retail rate of sales tax. These fees are included in gross income related to the purchase of electricity pursuant to Miss. Code Ann. Section 27-65-19(1)(a)(i).

35 Miss. Admin. Code Pt. 4, R. 505 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 600 Purchases

35 Miss. Admin. Code Pt. 4, R. 601 Purchases by utility companies are subject to tax as follows:

Private or Public Utilities Governmental Utilities EPA’s Automobiles, trucks, etc. (10,000 pounds or less gross weight) 5% 0% 3% Automobiles, trucks, etc. (over 10,000 pounds gross weight) 3% 0% 1% Electricity or other fuel for use in operating the generating or distribution facility 0% 0% 0% Manufacturing machinery and machine parts 1 ½% 0% 1% Motor Fuel 0% 0% 0% Office furniture and equipment Regular retail rate 0% 1% Other property for use in operating the generating or distribution system Regular retail rate 0% 1% Tangible personal property and services for resale in the regular course for business 0% 0% 0% Telephone, lights and water Regular retail rate 0% Regular retail rate Tools and equipment Regular retail rate 0% 1%

35 Miss. Admin. Code Pt. 4, R. 602 Rule 602

Rental or lease by utility companies of tangible personal property is taxed at the same rates as sales of the same property.

35 Miss. Admin. Code Pt. 4, R. 603 Rule 603

Consumers who purchase electric power directly from the Tennessee Valley Authority are liable for use tax on the purchase price. The Use Tax Law applies the same rates as are levied under Sales Tax Law on similar transactions.

35 Miss. Admin. Code Pt. 4, R. 604 Rule 604

The use or consumption by the producer, manufacturer or distributor of the product or service produced, manufactured, or purchased wholesale is taxable at the rate applicable to the use of the product. The tax due is measured by the cost or value of the product or service.

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35 Miss. Admin. Code Pt. 4, R. 605 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 700 Filing Requirements

35 Miss. Admin. Code Pt. 4, R. 701 Rule 701

Any person rendering taxable utility services must complete the Distribution of Sales Tax by Cities Schedule as part of the sales tax return filing. The 2% tax discount does not apply to utility charges by utility service companies. Adequate records must be maintained to substantiate tax classification of sales and purchases.

35 Miss. Admin. Code Pt. 4, R. 702 (Reserved)

35.IV.06.01 revised effective August 3, 2024.

Chapter 02 Telecommunications 100 Definitions 101 Telecommunications Service means the electronic transmission, conveyance or routing of voice, data, audio, video or any other information or signals to a point or between points. Telecommunications service also includes the transmission, conveyance or routing in which computer processing applications are used to act on the form, code or protocol of the content for purposes of transmission, conveyance or routing without regard to whether such service is referred to as voice over Internet protocol services or is classified by the Federal Communications Commission as enhanced or value added. 101.01 Telecommunications services do not include: 1. Data processing and information services that allow data to be generated, acquired, stored, processed or retrieved and delivered by an electronic transmission to a customer whose primary purpose for the use of the service is to obtain the processed data or information. 2. Installation or maintenance of wiring or equipment on a customer’s premises. 3. Tangible personal property. 4. Directory advertising and other advertising. 5. Billing and collection services provided to third parties. 6. Internet access service. 7. Radio and television audio and video programming services regardless of the medium of delivery, and the transmission, conveyance or routing of the service by the programming service provider. 8. Ancillary services. 9. Digital products delivered electronically, including but not limited to, software, music, video, reading materials or ring tones.

35 Miss. Admin. Code Pt. 4, R. 102 Rule 102

Ancillary services means services that are associated with or incidental to the provision of telecommunications services, including, but not limited to, detailed telecommunications billing, directory assistance, vertical service and voice mail service.

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35 Miss. Admin. Code Pt. 4, R. 103 Rule 103

Bundled transaction means a transaction that consists of distinct and identifiable properties or services which are sold for a single non-itemized price but which are treated differently for tax purposes.

35 Miss. Admin. Code Pt. 4, R. 104 Rule 104

Call-by-call basis means any method of charging for telecommunications services where the price is measured by individual calls.

35 Miss. Admin. Code Pt. 4, R. 105 Rule 105

Communications channel. Communicating data from one location to another requires some form of pathway or medium. These pathways, called communication channels, use two types of media: cable (twisted-pair wire, cable, and fiber-optic cable) and broadcast (microwave, satellite, radio, and infrared).

35 Miss. Admin. Code Pt. 4, R. 106 Rule 106

Conference bridging means an ancillary service that links two (2) or more participants of an audio or video conference call and may include the provision of a telephone number. Conference bridging does not include the telecommunication services used to reach the conference bridge.

35 Miss. Admin. Code Pt. 4, R. 107 Rule 107

Customer means the person or entity that contracts with the seller of telecommunications services or the end user of the services if the end user is not the contracting party. A reseller of telecommunications services is not considered a customer.

35 Miss. Admin. Code Pt. 4, R. 108 Rule 108

Detailed telecommunications billing service means an ancillary service of separately stating information pertaining to individual calls on a customer’s billing statement.

35 Miss. Admin. Code Pt. 4, R. 109 Rule 109

Directory assistance means an ancillary service of providing telephone number information and/or address information.

35 Miss. Admin. Code Pt. 4, R. 110 End user means the person who utilizes the telecommunications service

35 Miss. Admin. Code Pt. 4, R. 111 Rule 111

Home service provider means the facilities-based carrier or reseller with which the customer contracts to provide mobile telecommunication services.

35 Miss. Admin. Code Pt. 4, R. 112 Rule 112

International means a telecommunications service that originates or terminates in the United States and terminates or originates outside the United States, respectively.

35 Miss. Admin. Code Pt. 4, R. 113 Rule 113

Interstate means a telecommunications service that originates in one (1) United States state or United States territory or possession, and terminates in a different United States state or United States territory or possession.

35 Miss. Admin. Code Pt. 4, R. 114 Rule 114

Intrastate means a telecommunications service that originates in one (1) United States state or United States territory or possession, and terminates in the same United States state or United States territory or possession.

35 Miss. Admin. Code Pt. 4, R. 115 Rule 115

Mobile telecommunications service is a type of telecom service. Mississippi has adopted the definition of “mobile telecommunication service” as stated in Section 124(7) of Public Law 106-252 (Mobile Telecommunications Sourcing Act). Mobile telecom services

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include, but are not limited to: mobile phone service, mobile radio service, two-way mobile radio service, radio repeater service, wireless communication service, satellite telephone service, mobile local and long distance service, paging service, cellular roaming charges and beeper service.

35 Miss. Admin. Code Pt. 4, R. 116 Rule 116

Place of primary use means the street address representative of where the customer’s use of the telecommunications service primarily occurs, which will be either the residential street address or the primary business street address of the customer. The place of primary use must be within the licensed service area of the home service provider.

35 Miss. Admin. Code Pt. 4, R. 117 Rule 117

Prepaid calling service means the right to access exclusively telecommunications services, which must be paid for in advance and which enables the origination of calls using an access number or authorization code and that is sold in predetermined units or dollars which the number declines with use in a known amount.

35 Miss. Admin. Code Pt. 4, R. 118 Rule 118

Prepaid wireless calling service means a telecommunications service that provides the right to utilize mobile wireless service as well as other non-telecommunications services such as the download of digital products which must be paid for in advance that is sold in predetermined units or dollars of which the number declines with use in a known amount.

35 Miss. Admin. Code Pt. 4, R. 119 Rule 119

Private communication service means a telecommunication service that entitles the customer to exclusive or priority use of a communications channel or group of channels between or among termination points, regardless of the manner in which such channel or channels are connected, and includes switching capacity, extension lines, stations and any other associated services that are provided in connection with the use of such channel or channels.

35 Miss. Admin. Code Pt. 4, R. 120 Rule 120

Service address means the location of the telecommunications equipment to which a customer’s call is charged and from which the call originates or terminates, regardless of where the call is billed or paid.

35 Miss. Admin. Code Pt. 4, R. 121 Rule 121

Vertical service means an ancillary service that is offered in connection with one or more telecommunications services, which offers advanced calling features that allow customers to identify callers and to manage multiple calls and call connections, including conference bridging services.

35 Miss. Admin. Code Pt. 4, R. 122 Rule 122

Voice mail service means an ancillary service that enables the customer to store, send or receive recorded messages. Voice mail service does not include any vertical services that the customer may be required to have in order to utilize the voice mail service.

35 Miss. Admin. Code Pt. 4, R. 123 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 200 Levy

35 Miss. Admin. Code Pt. 4, R. 201 Rule 201

Income received from all charges for intrastate telecommunications services is taxable at the regular retail rate of sales tax pursuant to the provisions of Miss. Code Ann. Section

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27-65-19(d)(i)(1). When intrastate toll charges are split between two or more companies, the company doing the billing to and collecting from the customer will be responsible for collecting and remitting the applicable sales tax.

35 Miss. Admin. Code Pt. 4, R. 202 Rule 202

Income received from all charges for interstate telecommunications services is taxable at the regular retail rate of sales tax pursuant to the provisions of Miss. Code Ann. Section 27-65-19(d)(i)(2). A credit will be allowed for taxes paid to another state that are levied under the authority of that state and imposed on interstate telecommunications service. This credit will be limited to the smaller of the Mississippi retail tax due on the service or the tax properly paid to another state on the service.

35 Miss. Admin. Code Pt. 4, R. 203 Rule 203

Income received from all charges for international telecommunications services is taxable at the regular retail rate of sales tax pursuant to the provisions of Miss. Code Ann. Section 27-65-19(d)(i)(3).

35 Miss. Admin. Code Pt. 4, R. 204 Rule 204

Income received from all charges for ancillary services is taxable at the regular retail rate of sales tax pursuant to the provisions of Miss. Code Ann. Section 27-65-19(d)(i)(4).

35 Miss. Admin. Code Pt. 4, R. 205 Rule 205

Income received from all charges for products delivered electronically, including, but not limited to, software, music, games, reading materials or ring tones is subject to the regular retail rate of sales tax pursuant to the provisions of Miss. Code Ann. Section 27-65- 19(d)(i)(5).

35 Miss. Admin. Code Pt. 4, R. 206 Rule 206

Income received from the sale, rental, installation, maintenance or repair of tangible personal property is taxable at the regular retail rate of sales tax pursuant to Miss. Code Ann. Sections 27-65-17 and 27-65-23. Any merchandise given away or sold at a reduced amount as the result of signing a service contract, are not subject to use tax and are not treated as a withdrawal from inventory. Sales tax is due on the amount received from the customer.

35 Miss. Admin. Code Pt. 4, R. 207 Rule 207

Income received from the sale of a prepaid calling service or prepaid wireless calling service is taxable at the regular retail rate of sales tax at the time of sale of the service.

35 Miss. Admin. Code Pt. 4, R. 208 Rule 208

The gross income received from telephone answering or paging services, whether by person or machine, is taxable at the regular retail rate of sales tax pursuant to Miss. Code Ann. Section 27-65-23.

35 Miss. Admin. Code Pt. 4, R. 209 Rule 209

The sale of a bundled transaction is taxable on the total cost of the bundled transaction unless the provider can reasonably identify the non-taxable portion from its books and records kept in the regular course of business as provided for in Miss. Code Ann. Section 27-65-19(d)(vii)(2).

35 Miss. Admin. Code Pt. 4, R. 210 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 300 Sourcing Provisions

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35 Miss. Admin. Code Pt. 4, R. 301 Rule 301

Sales of telecommunications sold on a call-by-call basis are sourced to Mississippi when the call either originates or terminates in Mississippi and is charged to a service address in Mississippi.

35 Miss. Admin. Code Pt. 4, R. 302 Rule 302

Sales of telecommunications services that are sold for a fixed or flat monthly amount and the customer is entitled to make an unlimited number of calls are sourced to Mississippi when billed to a customer’s place of primary use in Mississippi.

35 Miss. Admin. Code Pt. 4, R. 303 Rule 303

Sales of mobile telecommunications services are sourced to Mississippi when the customer’s place of primary use is in Mississippi.

35 Miss. Admin. Code Pt. 4, R. 304 Rule 304

Sales of private communications services where all of the customer channel termination points are located in Mississippi are intrastate services and are sourced to Mississippi.

35 Miss. Admin. Code Pt. 4, R. 305 Rule 305

Sales of private communications services with multiple customer channel termination points in multiple states are interstate or international services and are sourced to Mississippi on a prorated basis using the number of termination points in Mississippi to the total number of termination points.

35 Miss. Admin. Code Pt. 4, R. 306 Rule 306

Sales of prepaid calling services or prepaid wireless calling services are sourced to Mississippi when the customer physically purchases the service at the vendor’s place of business in this state. If the customer does not physically purchase the service at a Mississippi business location, the sale is sourced to Mississippi if the customer’s shipping address is in this state and the sale involves shipment; or if the customer’s billing address is in Mississippi when the sale does not involve a shipment. In absence of any of the preceding, the sale of prepaid wireless calling services may be sourced based on the location associated with the mobile telephone number.

35 Miss. Admin. Code Pt. 4, R. 400 Mobile Telecommunications Provisions

35 Miss. Admin. Code Pt. 4, R. 401 Rule 401

A home service provider is responsible for obtaining and maintaining the customer’s place of primary use. The home service provider, acting in good faith, is entitled to rely on the address supplied by each customer in determining place of primary use and may be held harmless from any additional tax liability resulting from a different determination of place of primary use. All customer addresses relating to service contracts are deemed that customer’s place of primary use for the remaining term of the contract or agreement. The home service provider must obtain valid primary use addresses for extensions or renewals of such contracts or month-to-month services provided after the expiration of a contract.

35 Miss. Admin. Code Pt. 4, R. 402 Rule 402

If the address used by the home service provider is determined to be incorrect, the Department will give notice to the home service provider to change the place of primary use on a prospective basis effective with the date of the notice. However, any customer whose place of primary use is deemed incorrect shall have an opportunity to demonstrate that address is correct.

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35 Miss. Admin. Code Pt. 4, R. 403 Rule 403

The Department has the right to collect any taxes due directly from the customer that has failed to provide an address that meets the definition of the term “place of primary use” which results in taxes being due.

35 Miss. Admin. Code Pt. 4, R. 404 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 500 Wholesale Sales

35 Miss. Admin. Code Pt. 4, R. 501 Rule 501

Charges by one telecommunications provider to another telecommunications provider for services that are resold, including, but not limited to, access charges, are exempt provided that the purchaser holds a valid sales tax permit issued under Miss. Code Ann. Section 27- 65-27 and the purchaser is either located in this state or is providing telecommunications services in this state.

35 Miss. Admin. Code Pt. 4, R. 502 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 600 Sales to Direct Pay Permit Holders

35 Miss. Admin. Code Pt. 4, R. 601 Rule 601

Miss. Code Ann. Section 27-65-93 provides that taxes levied under Miss. Code Ann. Section 27-65-19 may be covered by the use of a direct pay permit. However, telecommunications services are not covered with the use of a direct pay permit due to the fact that interstate and intrastate charges must be reported separately by the telecommunications provider.

35 Miss. Admin. Code Pt. 4, R. 602 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 700 Taxable and Non-Taxable Charges and Fees

35 Miss. Admin. Code Pt. 4, R. 701 Rule 701

Charges by a service supplier for county emergency telephone (E-911) services are county fees and are not subject to any sales or use tax, and are not considered revenue of the service supplier for any purpose (Miss. Code Ann. Section 19-5-313).

35 Miss. Admin. Code Pt. 4, R. 702 Rule 702

Telephone services are considered taxable telecommunications services. Telephone services that are subject to tax include, but are not limited to, Federal access charges, connection and disconnection charges, reconnection charges, Federal universal service fees, local telephone number portability charges, charges for establishing new services, minimum charges and telecommunications nonrecurring charges.

35 Miss. Admin. Code Pt. 4, R. 703 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 800 Purchases

35 Miss. Admin. Code Pt. 4, R. 801 Rule 801

Pursuant to Miss. Code Ann Section 27-65-107(f) electricity or other fuel purchased by telephone companies to operate a transmission system is exempt from sales and use tax. Purchases by licensed retailers of appliances and other merchandise for resale in the regular course of business are exempt from sales and use tax. All other purchases are subject to the

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regular retail rate of tax. All telecommunications providers, with certain exceptions, are required to obtain a Direct Pay Permit for purposes of reporting and paying to the Department of Revenue the sales and use tax applicable to purchases or rentals of tangible personal property and services in lieu of payment to the vendor.

35 Miss. Admin. Code Pt. 4, R. 802 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 900 Reporting Requirements

35 Miss. Admin. Code Pt. 4, R. 901 Rule 901

Any person making taxable sales of telecommunications must complete the Distribution of Sales Tax by Cities Schedule, part of the sales tax return filing. The 2% tax discount does not apply to sales of telecommunications. Adequate records must be maintained to substantiate tax classifications.

35 Miss. Admin. Code Pt. 4, R. 902 Rule 902

All taxes due from Intrastate Long Distance charges and Local Service charges must be reported on the sales tax return separately from all taxes due from Interstate Long Distance using the appropriate tax code categories as specified in the instructions.

35 Miss. Admin. Code Pt. 4, R. 903 Rule 903

The tax due from the sale of components of bundled transactions must be reported separately by using the appropriate tax codes. The breakdown of actual charges should be used if available. The telecommunications provider must allocate the price among the services by either identifying the portion of the price attributable to each service from its books and records kept in the regular course of business or based on a reasonable allocation methodology approved by the Department.

35 Miss. Admin. Code Pt. 4, R. 904 (Reserved)

35.IV.06.02 revised effective April 1, 2018.

Chapter 03 Telegraph Services

Taxable Income

35 Miss. Admin. Code Pt. 4, R. 100 Rule 100

The gross income of a telegraph business is subject to the regular retail rate of sales tax on charges for transmitting messages between points within this State, with no deduction for any part of an intrastate rate charge because of routing across a state line. Rental of tangible personal property and any other miscellaneous income, such as charges made in connection with local pick-up and delivery service, are likewise taxable.

35 Miss. Admin. Code Pt. 4, R. 101 (Reserved)

Exemptions

35 Miss. Admin. Code Pt. 4, R. 200 Rule 200

Exemptions from tax arise from charges made for transmission of messages between this State and other state or foreign counties. Charges for transmission of messages for the

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State of Mississippi, its counties and municipalities, and the Federal Government are exempt. Adequate records must be maintained to substantiate exempt sales

35 Miss. Admin. Code Pt. 4, R. 201 (Reserved)

Purchases

35 Miss. Admin. Code Pt. 4, R. 300 Rule 300

Purchases of all supplies and equipment are subject to the retail sales or use tax without any exemption due to the use of the equipment in interstate commerce.

35 Miss. Admin. Code Pt. 4, R. 301 Rule 301

Rental or lease of tangible personal property to telegraph companies is taxed at the same rate as sales of the same property

35 Miss. Admin. Code Pt. 4, R. 302 (Reserved)

Chapter 04 Water

35 Miss. Admin. Code Pt. 4, R. 100 Levy

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

Pursuant to Miss. Code Ann. Section 27-65-19(1)(a) sales to consumers of potable water and services related thereto by rural water associations, municipalities, privately owned businesses, stock companies or any other persons are taxable at the regular retail rate of sales tax, except as otherwise provided. These sales are exempt when sold for residential, noncommercial, nonagricultural use.

35 Miss. Admin. Code Pt. 4, R. 102 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 200 Residential Usage

35 Miss. Admin. Code Pt. 4, R. 201 Rule 201

In order to qualify for the residential exemption, the water must be sold to, billed to, and paid for by the homeowner or resident of the facility. Residential customers may include, but are not limited to, privately owned hunting and fishing camps, summer homes, cabins, or apartments.

35 Miss. Admin. Code Pt. 4, R. 202 Rule 202

Hunting or fishing camps that provide hunts and/or accommodations for a fee are not allowed the residential exemption and are subject to the regular retail rate of tax. Vacant apartments with water being billed to the apartment complex or manager are not eligible for the residential exemption. Private homes or residences owned by a business or corporation that are used for commercial purposes and that may be used to provide overnight stay on a temporary or transient basis are subject to the regular retail rate of tax. Such common establishments include bed & breakfast facilities.

35 Miss. Admin. Code Pt. 4, R. 203 Rule 203

Apartments rented to non-transient customers where water is sold to, billed to and paid for by the apartment owner are eligible for the residential exemption as long as the water is separately metered between residential and commercial use.

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35 Miss. Admin. Code Pt. 4, R. 204 Rule 204

35 Miss. Admin. Code Pt. 4, R. 205 Rule 205

Charges billed to an apartment owner or homeowner’s association for commercial use in common areas such as swimming pools, recreational facilities, leasing offices, clubhouses and irrigation sprinkler systems are not residential usage and are taxable at the regular retail rate of tax.

35 Miss. Admin. Code Pt. 4, R. 206 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 300 Exemptions

35 Miss. Admin. Code Pt. 4, R. 301 Rule 301

Sales of water are not subject to sales tax when sold to a qualified exempt organization described in Mississippi statute.

35 Miss. Admin. Code Pt. 4, R. 302 Rule 302

Pursuant to Miss. Code Ann. Section 27-65-19(1)(a)(ii) sales of water to a church exempt from federal income taxation under 26 USCS Section 501(C)(3) shall be excluded from taxable gross income of the business if the exempt sales are utilized on property that is primarily used for religious or educational purposes. Any church purchasing water may sign an affidavit attesting to the fact that they are exempt from federal taxation and that they qualify to be exempt from sales tax. Utility providers can accept this affidavit or the 501(c)(3) certificate from the Internal Revenue Service as evidence that the church qualifies for the exemption.

35 Miss. Admin. Code Pt. 4, R. 303 Rule 303

Manufacturers holding a valid direct pay permit must provide their direct pay permit to its utility providers. The manufacturer will not be charged any tax by the utility provider but will be responsible for remitting the correct tax directly to the Department of Revenue. Utility companies must keep their customers direct pay permit or affidavit as documentation in order to sell water for non-residential purposes exempt.

35 Miss. Admin. Code Pt. 4, R. 304 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 400 Taxability of Other Income

35 Miss. Admin. Code Pt. 4, R. 401 Rule 401

All receipts from customers, which are not refundable or which are not investments in marketable equities are considered to be gross income, taxable at the appropriate rate applicable to the customer. Examples are:

Charges for line extension 2. Charges for setting or installing meter 3. Connection or reconnection charges, including sterilization, inspection fees, tap on fees, etc. 4. Non-refundable membership fees 5. Plumbing services on customer's property

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Water sales, including fire protection sprinkler charges

35 Miss. Admin. Code Pt. 4, R. 402 Rule 402

Any of the above charges made to a residential customer are exempt when billed by the utility company. Any charges for the above listed services performed by a plumber are taxable pursuant to Miss. Code Ann. Section 27-65-23. Any charges for line extensions or relocations made during construction of a residence are taxable at the regular retail rate of tax when billed to the contractor. Charges for water billed to the contractor for temporary use during construction is also taxable at the regular retail rate of tax.

35 Miss. Admin. Code Pt. 4, R. 403 Rule 403

Grants in Aid of Construction (Government, private foundations, or disinterested parties) 2. Investment income 3. Meter deposits (refundable) 4. Permit charges on plumbing installations 5. Real estate rentals 6. Refundable membership fees 7. Reimbursement for line relocation 8. Sales or exchanges of water between public utilities 9. Scrap sales 10. Sewage charges if separately itemized

35 Miss. Admin. Code Pt. 4, R. 405 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 500 Purchases

35 Miss. Admin. Code Pt. 4, R. 501 Rule 501

Purchases of equipment, chemicals and other supplies by privately owned water systems are taxed at the regular retail rate of sales or use tax except that purchases of chlorine, sodium fluoride or other chemicals which, after being added, will remain in the water to the point of the sale for ultimate use are exempt from sales tax. Purchases of tangible personal property and services which are used in the ordinary and necessary operation of nonprofit water associations or corporations and municipally owned and operated systems are exempt from tax.

35 Miss. Admin. Code Pt. 4, R. 502 Rule 502

All other sales and purchases claimed as exempt must be substantiated by sales invoices or other records approved by the Commissioner.

35 Miss. Admin. Code Pt. 4, R. 503 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 600 Filing Requirements

35 Miss. Admin. Code Pt. 4, R. 601 Rule 601

Any person making taxable sales of potable water must complete the Distribution of Sales Tax by Cities Schedule, part of the sales tax return filing. The 2% tax discount does not

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apply to sales of potable water. Adequate records must be maintained to substantiate tax classifications.

35 Miss. Admin. Code Pt. 4, R. 602 (Reserved)

Chapter 05 TV Cable Systems and Similar Activities

Levy

35 Miss. Admin. Code Pt. 4, R. 100 Rule 100

Every person engaging or continuing in the business of TV cable systems, subscription TV services and other similar activities are liable for the regular retail rate of tax on gross income from such services including the basic fee, installation and connection fees, signal descrambling fees, equipment or rental fees, maintenance fees, sales of tangible personal property (program schedules, etc.) and any other related charges.

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

Sales of TV cable or subscription services for the private use of students, faculty members or any other person enrolled or domiciled at an “exempt” school, college or university are taxable at the regular retail rate of tax.

35 Miss. Admin. Code Pt. 4, R. 102 (Reserved)

Installation and Services

35 Miss. Admin. Code Pt. 4, R. 200 Rule 200

Persons performing contracts or providing services for TV cable or subscription companies are taxable as follows: 1. Hook-up, repair or any service on a TV cable transmission line, which is to be resold, is not subject to sales tax. Such sub services are taxable at the regular retail rate of tax when resold to a consumer. 2. Services or repairs on a TV cable transmission line, which are not for resale, are taxable at the regular retail rate of tax. 3. Contracts (on a project basis) in excess of $10,000 are taxable at the 3 ½% contractor’s rate of tax levied by Section 27-65-21. This would include contracts for pre-wiring a building or complex, except for residential construction, when performed for an owner. Compensation received for work which is to be resold to a consumer (example: hook-up service for residences) should not be included in the total contract receipts when properly identified. 4. Subcontracts performed for general contractors on qualified jobs are not subject to sales tax.

35 Miss. Admin. Code Pt. 4, R. 201 (Reserved)

Purchases

35 Miss. Admin. Code Pt. 4, R. 300 Rule 300

Purchases of tangible personal property by licensed TV cable or subscription companies for resale or rental are exempt from sales tax. Purchases of other property or supplies

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furnished the customer or used by the cable company in rendering the service are taxable at the regular retail rate of tax.

35 Miss. Admin. Code Pt. 4, R. 301 (Reserved)

Reporting Requirements

35 Miss. Admin. Code Pt. 4, R. 400 Rule 400

Adequate records must be maintained to substantiate tax classifications of sales and purchases.

35 Miss. Admin. Code Pt. 4, R. 401 (Reserved)

Sub Part 07 Manufacturing and Production Chapter 01 Reserved

35.IV.07.01 revised effective March 6, 2020

Chapter 02 Custom Creosoting and Treating, Planing and Sawing and Custom Meat Processing

35 Miss. Admin. Code Pt. 4, R. 100 Rule 100

Gross income received from custom creosoting and treating, custom planing, custom sawing and custom meat processing is taxable at the regular retail rate of sales tax. Gross taxable income includes all charges connected with the service. Services performed for a licensed retailer upon merchandise for resale in the regular line of his business are exempt from sales tax. Charges for custom creosoting and treating of track materials and the sale of track materials to a railroad whose rates are fixed by the I.C.C. are taxable at the 3% special rate of tax.

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

Purchases of raw materials which will become a component part of the product being processed are exempt. Purchases of electric power or other fuels used directly in custom processing are taxable at a 1 ½% special rate of sales or use tax. Purchases of manufacturing machinery or machine parts to be used directly and exclusively in custom processing are taxable at the 1 ½% special rate. All other purchases are subject to regular retail sales or use taxes.

35 Miss. Admin. Code Pt. 4, R. 102 Rule 102

Rental or lease of machinery and other tangible personal property is taxed at the same rates as sales of the same property.

35 Miss. Admin. Code Pt. 4, R. 103 Rule 103

Adequate records must be maintained to substantiate tax classifications of sales and purchases.

35 Miss. Admin. Code Pt. 4, R. 104 (Reserved)

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Chapter 03 Manufacturers and Custom Processors

35 Miss. Admin. Code Pt. 4, R. 100 General

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

Mississippi sales tax law provides for a reduced rate and certain exemptions for manufacturers and custom processors. The reduced rate of one-and-one-half percent (1½%) applies to the sale or rental of manufacturing machinery and machine parts that are used directly in the manufacturing process. Manufacturers and custom processors are also eligible for an exemption on purchases of electricity and natural gas used in the manufacturing process, as provided either by Miss. Code Ann. Section 27-65-107(f) or 27- 65-111(n) when used in an engine. Sales of raw materials, catalysts, processing chemicals, welding gases or other industrial gases to a manufacturer for use directly in manufacturing or processing a product for sale or rental are exempt.

35 Miss. Admin. Code Pt. 4, R. 102 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 200 Manufacturer, Custom Processor and Manufacturing Activities

35 Miss. Admin. Code Pt. 4, R. 201 Rule 201

A "manufacturer" is defined as a person who is exclusively or predominately engaged in the business of fabricating, compounding, or creating from his own raw materials or ingredients any tangible personal property through the application of skill and labor, either by hand or through the use of machinery, for sale or rental through the regular channels of trade.

35 Miss. Admin. Code Pt. 4, R. 202 Rule 202

“Manufacturing” refines, improves, changes the condition of raw materials, or converts the form of the materials into new, different, or more useful property and includes the fabrication or production of special made-to-order articles and the generation of electricity. A person who is engaged in manufacturing and non-manufacturing activities may be classified as a manufacturer provided that said manufacturing activities are operated as a separate business or division.

35 Miss. Admin. Code Pt. 4, R. 203 Rule 203

Persons performing work such as logging operations, cooking, and serving food by a restaurant, washing and screening sand and gravel, mining, severing or otherwise producing natural resource products, transporting raw materials from place of production to point of processing, etc., are not considered manufacturers. Neither are persons performing such activities as hatching and raising baby chicks for market considered to be manufacturers.

35 Miss. Admin. Code Pt. 4, R. 204 Rule 204

A "remanufacturer" is defined as a person who is engaged in performing activities of an industrial or commercial nature wherein labor or skill is applied by hand or machinery, to materials, a portion of which may belong to the customer, so that rebuilt articles of tangible personal property, comparable in quality to new articles of the same property, are created, a majority of the value of which is produced by the remanufacturing activity.

35 Miss. Admin. Code Pt. 4, R. 205 Rule 205

A "custom processor" is defined as any person who performs a manufacturing or remanufacturing service done or made to order upon the property of the customer and

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includes laundering, cleaning, and pressing.

35 Miss. Admin. Code Pt. 4, R. 206 Rule 206

Remanufacturing or custom processing does not include repairs or maintenance which restores the property to a workable condition, and which does not constitute a majority of the value of the property repaired.

35 Miss. Admin. Code Pt. 4, R. 207 Rule 207

"Manufacturing plant" means the real and personal property owned or leased by a manufacturer which is assembled and used at a fixed location to perform activities defined as manufacturing.

35 Miss. Admin. Code Pt. 4, R. 208 Rule 208

“Manufacturing” begins at the point where the raw materials are transferred to the actual processing operation from storage or stockpile at the plant, and ends when the manufactured product leaves the assembly line for storage or shipment, and includes the processing of the by-product or waste materials to avoid air and water pollution.

35 Miss. Admin. Code Pt. 4, R. 209 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 300 Manufacturing Machinery

35 Miss. Admin. Code Pt. 4, R. 301 Rule 301

“Manufacturing machinery” is the machinery that is used within a plant exclusively and directly in manufacturing a commodity for sale, rental or in custom processing for a fee. Motorized units and other conveyor systems serving a specific function within the line of process at the plant site will be classified as manufacturing machinery, as well as equipment used in the processing of waste materials to avoid air and water pollution.

35 Miss. Admin. Code Pt. 4, R. 302 Rule 302

Manufacturing machinery does not include machinery for use in the severance of timber, sand, gravel, oil, gas, or other natural resources produced or severed from the soil or water; maintenance or repair machinery; research laboratory machinery; storage facilities warehouse machinery; equipment for protection of the plant or comfort of the personnel or other equipment and supplies of like character. Equipment used in the treatment of water by a manufacturer qualifies for the reduced rate of tax of one-and-one-half percent (1½%). Equipment used in the treatment of water by a public or private water system or sewage system is not classified as manufacturing machinery and does not qualify for the reduced rate of tax. The term “manufacturing machinery" does not include foundations or materials for their construction, nor does it include portable equipment that is not assembled and used at a fixed location.

35 Miss. Admin. Code Pt. 4, R. 303 Rule 303

“Machine parts” are component parts of manufacturing machinery and do not include parts for service equipment, non-manufacturing machinery, fuels, lubricants, paints, or tools for maintenance.

35 Miss. Admin. Code Pt. 4, R. 304 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 400 Rule 400

Pollution Control Equipment Used by Manufacturers and Custom Processors

35 Miss. Admin. Code Pt. 4, R. 401 Rule 401

Purchases of pollution control equipment by manufacturers and custom processors are

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exempt from sales or use tax. The term “pollution control equipment” means equipment, devices, machinery, or systems used or acquired to prevent, control, monitor or reduce air, water, or ground water pollution, or solid or hazardous waste as required by federal or state law or regulation. The use of pollution control equipment for other purposes would not result in the exemption being disallowed.

35 Miss. Admin. Code Pt. 4, R. 402 Rule 402

The taxpayer will be required to substantiate that any equipment purchased for purposes of pollution control does qualify for the exemption. The taxpayer must provide certification from a professional engineer that the purchases do meet the requirements of the exemption regarding the prevention, control, monitoring, or reduction of air, water, or ground water pollution or solid or hazardous waste. The certification must provide a list of the purchases and a description of the use of such purchases. Certification may include: 1. Federal law, state law or regulation requiring use of certain equipment, 2. Federal permit documentation, 3. State permit documentation, 4. Engineering report, 5. Schematic reports including project data, equipment specifications and drawings, or 6. Other.

35 Miss. Admin. Code Pt. 4, R. 403 Rule 403

Replacement and/or repair parts for pollution control equipment are exempt from tax if the initial purchase of the equipment to be repaired or refurbished was or would have been exempt. The exemption would also apply to the repair labor.

35 Miss. Admin. Code Pt. 4, R. 404 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 500 Sales and Purchases Made by Manufacturers and Custom Processors

35 Miss. Admin. Code Pt. 4, R. 501 Rule 501

Exempt sales by manufacturers include sales of component materials to contractors with a valid material purchase certificate number, sales to other manufacturers for further processing, sales to licensed dealers or retailers for resale through the regular course of business, or sales to exempt customers (city, governmental agencies, etc.). Sales of manufacturing machinery or machine parts to other manufacturers are taxable at the one- and-one-half percent (1½%) reduced rate of sales tax. Sales to other consumers or users are subject to the regular retail rate of tax.

35 Miss. Admin. Code Pt. 4, R. 502 Rule 502

Sales of tangible personal property by the manufacturer or custom processor are exempt on the gross proceeds of sale when shipped, transported, or exported from the State and first use occurs in another state or country, whether such shipment is made by the seller, purchaser, or any third party. The activities of providing instructions, training, or allowing an inspection of the property between the seller and the buyer prior to the shipment of property does not establish a first use in the State of Mississippi. 503 Purchases of machinery, tools or repair parts or replacements, fuel or supplies used directly in manufacturing, converting, or repairing ships of three thousand (3,000) tons load displacement and over are exempt from sales or use tax. However, purchases of office and plant supplies or other equipment not directly used on the ship being built, converted, or

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repaired are subject to the regular retail rate of sales or use tax.

35 Miss. Admin. Code Pt. 4, R. 504 Rule 504

Purchases by manufacturers of raw materials which become a component part of the finished product, containers for sale with the finished product, or catalysts, chemicals or gases used directly in processing are exempt from sales or use tax. Purchases of electric power or other fuel used directly in the manufacturing process are exempt as provided by Miss. Code Ann. Section 27-65-107(f) or 27-65-111(n). Purchases of machinery or machine parts used directly in the manufacturing process are taxable at the one-and-one- half percent (1½%) reduced rate of sales or use tax. Purchases of all other equipment, utilities, and supplies (furniture, fixtures, cleaning materials, etc.) are taxable at the regular retail rate of tax. Pursuant to 27-65-21(1)(a)(ii), amounts included in commercial construction contracts with manufacturers representing the sale of manufacturing machinery shall be taxed at the one-and-one-half percent (1½%) reduced rate of tax in lieu of the three-and-one-half percent (3½%) contractor’s sales tax.

35 Miss. Admin. Code Pt. 4, R. 505 Rule 505

Delivery charges are subject to sales tax when billed by vendors even though such amounts are separately stated on the seller's invoice apart from the sales price of the property.

35 Miss. Admin. Code Pt. 4, R. 506 Rule 506

Owners or other persons receiving benefit from use of tangible personal property in this state are liable for use tax on such property.

35 Miss. Admin. Code Pt. 4, R. 507 Rule 507

Charges for labor on repairs rendered at out-of-state locations are exempt where specifically identifiable.

35 Miss. Admin. Code Pt. 4, R. 508 Rule 508

Rental or lease of machinery and other tangible personal property by a manufacturer is taxed at the same rates as sales of the same property. However, manufacturing machinery rented to a manufacturer or custom processor for use in the manufacture of wood containers for sale is exempt from tax.

35 Miss. Admin. Code Pt. 4, R. 509 Rule 509

Adequate records must be maintained to substantiate the tax classification of sales and purchase transactions.

35 Miss. Admin. Code Pt. 4, R. 510 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 600 Methods of Reporting and Paying of Sales and Use Tax

35 Miss. Admin. Code Pt. 4, R. 601 Rule 601

All manufacturers and custom processors, with certain exceptions, are required to obtain a Direct Pay Permit for purposes of reporting and remitting the sales and use tax applicable to purchases or rentals of tangible personal property, utilities, with the exception of telecommunications, and services to the Department of Revenue in lieu of paying the applicable tax to the vendor. If a permit holder continues to pay sales tax to the vendor rather than remit directly to the Department, then the permit holder will be required to contact the vendor for a credit or refund of any overpayment of tax; this will be required in all instances, even if the overpayment is discovered during a sales or use tax audit where an assessment of additional tax has been made. No refunds or overpayments will be allowed beyond the Statute of Limitations as provided for in Miss. Code Ann. Section 27- 65-42.

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35 Miss. Admin. Code Pt. 4, R. 602 Rule 602

Any sales or use tax due from purchases made by manufacturers and custom processors must be reported and remitted under the company’s use tax account number. All sales tax due from sales to consumers must be reported and remitted under the company’s sales tax account number.

35 Miss. Admin. Code Pt. 4, R. 603 (Reserved)

35.IV.7.03 revised effective August 3, 2026

Sub Part 08 Agriculture

Chapter 01 Florists and Nurserymen

35 Miss. Admin. Code Pt. 4, R. 100 Rule 100

Retail sales of flowers, potted plants, shrubbery, nursery stock, wreaths, bouquets and similar items and rental of tangible personal property by florists or nurserymen are taxable at the regular retail rate of tax.

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

When a nurseryman, florist or other person makes retail sales of shrubbery and similar items, and as a part of the transaction agrees to transplant them on the land of the purchaser, the tax applies to the total charge, including when installation is billed separately. The service of landscaping is taxable at the regular retail rate of tax.

35 Miss. Admin. Code Pt. 4, R. 102 Rule 102

Sales of livestock feed, poultry feed, fish feed, seed, vegetable seedlings and fertilizer to anyone are exempt from sales tax. Sales of defoliants, insecticides, fungicides, and herbicides are exempt when they are to be used in growing agricultural and forestry products for market. When sold for use on lawns or home gardens, such sales are taxed at the regular retail rate of tax.

35 Miss. Admin. Code Pt. 4, R. 103 Rule 103

When florists sell through a telecommunication delivery association, the following will apply: 1. On all orders taken by a Mississippi florist and communicated to a second florist for delivery, the florist accepting the order is liable for sales tax on the amount collected from the customer. 2. When a Mississippi florist receives instructions from another florist for delivery, the Mississippi florist receiving such instructions is not liable for sales tax on receipts from the transaction. 3. Charges for telecommunicated messages are exempt when billed separately to the customer.

35 Miss. Admin. Code Pt. 4, R. 104 Rule 104

Sales by producers of Christmas trees, hay, straw, fresh cut flowers and similar products are exempt when the product is grown in Mississippi, cut, severed or otherwise removed from the farm, grove, garden or other place of production and first sold from such place of production in the original state or condition of preparation of sale.

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35 Miss. Admin. Code Pt. 4, R. 105 Rule 105

Sales of electricity, gas and other fuels to commercial horticulturists for use on a farm or in a greenhouse for growing vegetables or ornamental plants are exempt from sales tax. See Title 35 Miss. Admin. Code, Part IV, Subpart 6, Chapter 01 concerning the Affidavit for Utility Exemption. Such sales to non-producers selling vegetables and cut flowers are taxable at the regular retail rate of tax.

35 Miss. Admin. Code Pt. 4, R. 106 Rule 106

Sales of potting soil, mulch, or other soil amendments used in growing ornamental plants which bear no fruit of commercial value when sold to commercial plant nurseries that operate exclusively at wholesale and where no retail sales can be made are exempt.

35 Miss. Admin. Code Pt. 4, R. 107 Rule 107

Purchases by florists and nurserymen of supplies and equipment, such as tools, machinery, refrigeration equipment, delivery equipment, etc., for use or consumption in the trade are taxable at the regular retail rate of tax. Purchases by licensed florists and nurserymen of merchandise for resale or rental in the regular course of business are exempt from sales or use tax.

35 Miss. Admin. Code Pt. 4, R. 108 Rule 108

Adequate records must be maintained to substantiate tax classifications of sales or purchases.

35 Miss. Admin. Code Pt. 4, R. 109 (Reserved)

35.IV.8.01 revised effective December 1, 2020

Chapter 02 Agricultural

35 Miss. Admin. Code Pt. 4, R. 100 Definitions

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

Agricultural products include field crops, truck and horticultural products, livestock and livestock products, poultry and poultry products and any other product of the soil or water produced on a commercial scale for market.

35 Miss. Admin. Code Pt. 4, R. 102 Rule 102

Agricultural purpose means the predominant or exclusive growing or raising of agricultural products on a farmer’s own land or land leased by the farmer for growing or raising agricultural products for market.

35 Miss. Admin. Code Pt. 4, R. 103 Rule 103

Dairy producer means any person engaged in the production of milk for commercial use.

35 Miss. Admin. Code Pt. 4, R. 104 Rule 104

Farmer means an individual or company who grows agricultural products for market on land owned or leased by such individual or company.

35 Miss. Admin. Code Pt. 4, R. 105 Rule 105

Farm Implement means a complete unit that performs a specialized mechanical function and which is identifiable as a specific piece of equipment that is ordinary and customarily used on a farm. The trade term whole goods is not synonymous with the tax term farm implements.

35 Miss. Admin. Code Pt. 4, R. 106 Rule 106

Farm Tractor is limited to self-propelled equipment which performs no farm function within itself other than to move, draw or furnish power to other implements which may be

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attached. The term farm tractor does not include self-powered units which perform specialized functions such as combines, cotton pickers, hay balers, sprayers, dusters and stationary power units.

35 Miss. Admin. Code Pt. 4, R. 107 Rule 107

Livestock is defined to mean horses, cattle, swine, sheep, goats, mules, donkeys, poultry, and ratite. All other animals usually found on farms that are raised for commercial profit or commercial uses are also considered livestock. Livestock does not include dogs, cats, or any other domestic animals kept as pets.

35 Miss. Admin. Code Pt. 4, R. 108 Rule 108

A professional logger is a person, corporation, limited liability company or other entity, or an agent thereof, who possesses a professional logger’s permit issued by the Mississippi Department of Revenue.

35 Miss. Admin. Code Pt. 4, R. 109 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 200 Levy

35 Miss. Admin. Code Pt. 4, R. 201 Rule 201

Sales of farm tractors to farmers for agricultural purposes are taxable at the reduced rate of 1½%. Sales of tractors to anyone other than a farmer are taxable at the regular retail rate of tax.

35 Miss. Admin. Code Pt. 4, R. 202 Rule 202

The sales of farm implements to farmers for use directly in the production of poultry, ratite, domesticated fish as defined in Miss. Code Ann. Section 69-7-501, livestock, livestock products, agricultural crops or ornamental plant crops or used for other agricultural purposes when used on the farm are taxable at the reduced rate of 1½%.

35 Miss. Admin. Code Pt. 4, R. 203 Rule 203

Parts and labor used to maintain and/or repair farm tractors or farm implements which would be taxed at the reduced rate of 1½% are also subject to the reduced rate of 1½%.

35 Miss. Admin. Code Pt. 4, R. 204 Rule 204

Sales of three wheelers, four wheelers or other all-terrain vehicles (ATVs) are taxable at the regular retail rate unless the unit has a power takeoff and such power take-off is used to power an attached piece of farm machinery and is used exclusively for agricultural purposes. If the unit meets these requirements and is approved by the Commissioner, then it will be subject to tax as a self-propelled farm implement.

35 Miss. Admin. Code Pt. 4, R. 205 Rule 205

All purchases of tools, supplies, machinery and equipment which are bought for use in operation of farm implement businesses and not for resale, or which do not become an integral part of equipment being repaired are taxable at the regular rate of sales or use tax.

35 Miss. Admin. Code Pt. 4, R. 206 Rule 206

All purchases of farm machinery, parts and other merchandise for resale are exempt from sales or use tax.

35 Miss. Admin. Code Pt. 4, R. 207 Rule 207

Farm implements that qualify for the reduced 1½% rate of tax when sold to farmers for agricultural purposes include, but are not limited to: 1. Bush hogs 2. Combines

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Combine headers 4. Cotton pickers 5. Dozers 6. Track hoes 7. Fertilizer spreaders 8 Self-propelled sprayers 9. Cotton trailers – used only in the field (not tagged for highway use) 10. Above ground irrigation equipment including center pivot systems, pumps, motors and pipe

35 Miss. Admin. Code Pt. 4, R. 208 Rule 208

Items that do not qualify for the reduced 1½% rate of tax when sold to farmers include, but are not limited to: 1. Garden Tractor 2. Rotary Tiller 3. Power Saw 4. Lawn Mower 5. String Trimmer 6. Storage Bin which provides no function other than storage 7. Hand Tools 8. Manual Posthole Digger 9. Trailers for Highway use or any other vehicles which require a tag

35 Miss. Admin. Code Pt. 4, R. 209 Rule 209

The 1½% rate of tax also applies to sales to professional loggers on all equipment used in logging, pulpwood operations or tree farming which is either self-propelled or which is mounted so that it is permanently attached to other equipment which is self-propelled or permanently attached to other equipment drawn by a vehicle which is self-propelled. Parts and labor used to maintain and/or repair such equipment are also subject to the reduced rate of 1½%. Loggers have to be certified according to Sustainable Forestry Initiative guidelines in order to qualify for the professional logger’s permit.

35 Miss. Admin. Code Pt. 4, R. 210 Rule 210

Equipment and parts that qualify for the reduced 1½% rate of tax when sold to loggers include, but are not limited to: 1. Cutter 2. Chipper 3. Mulcher 4. Skidder 5. Forwarder 6. Loader and/or bucking saw attachment 7. Delimber (powered or non-powered) 8. Cables and chockers used on dozers and skidders 9. Equipment mounted on trucks or trailers used directly in logging 10. Dozer used to pull trucks, make roads, and site preparation for planting 11. Hydraulic fluid, Freon, oil, grease and filters used in the above equipment 12. Tires and repair parts for the above equipment

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35 Miss. Admin. Code Pt. 4, R. 211 Rule 211

Items sold to loggers that do not qualify for the reduced 1½% rate of tax include, but are not limited to: 1. Trucks 2. Trailers 3. Hand held power saws (chain saws) 4. Welding machines 5. Generator 6. Air compressors 7. Pressure washers 8. Hand tools 9. Equipment used to repair or maintain logging equipment 10. Tires and other parts used on trailers and trucks

35 Miss. Admin. Code Pt. 4, R. 212 Rule 212

Sales of aerators to domestic fish farmers for use in the raising of domesticated fish as defined in Miss. Code Ann. Section 69-7-501 are taxed at the reduced 1½% rate.

35 Miss. Admin. Code Pt. 4, R. 213 Rule 213

Sales of materials to a dairy producer used in the repair, renovation, addition to, expansion and/or improvement of buildings and related facilities used by a dairy producer will be taxed at the rate of 3½%.

35 Miss. Admin. Code Pt. 4, R. 214 Rule 214

Rental or lease of machinery and other tangible personal property is taxed at the same rates as sales of the same property.

35 Miss. Admin. Code Pt. 4, R. 215 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 300 Rule 300

Affidavit of Farmer Purchasing Tractors, Farm Implements and/or Parts and Labor

35 Miss. Admin. Code Pt. 4, R. 301 Rule 301

Any person purchasing at the reduced 1½% rate of sales tax farm tractors and farm implements and/or parts and labor used in the maintenance or repair of farm tractors and/or farm implements is required to sign an affidavit attesting to the fact that they meet the requirements for the reduced rate of tax. The Affidavit of Farmer Purchasing Tractors, Farm Implements and/or Parts and Labor can be found on the Department’s website.

35 Miss. Admin. Code Pt. 4, R. 302 Rule 302

Vendors can accept this affidavit as evidence that the farmer qualifies for the reduced rate. This affidavit expires annually. Once the affidavit expires, vendors must obtain a new one to ensure the farmer is still eligible for the reduced rate.

35 Miss. Admin. Code Pt. 4, R. 303 Rule 303

In any case of misuse of the affidavit, the difference in the reduced rate of tax and the regular retail rate will be due to the Department of Revenue along with the applicable rate of interest per month, which will be from the date of purchase until the deficiency is paid. When it is determined by the Commissioner that there has been intentional disregard of the law or an intent to defraud, there will also be added a fifty percent (50%) penalty to the deficiency.

35 Miss. Admin. Code Pt. 4, R. 304 (Reserved)

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35 Miss. Admin. Code Pt. 4, R. 400 Trade-ins, Warranty sales, Internal Sales, and Repossession

35 Miss. Admin. Code Pt. 4, R. 401 Rule 401

When a trade-in is taken as part payment, the tax applies on the difference received between the selling price and the amount allowed for a trade-in. A trade-in is limited to property of the same kind and character as that normally carried in inventory for sale.

35 Miss. Admin. Code Pt. 4, R. 402 Rule 402

When a sale is made involving different rates of tax, the amount allowed for a trade-in should be deducted from the selling price of property taxed at the same rate as the trade-in item.

35 Miss. Admin. Code Pt. 4, R. 403 Rule 403

When an item subject to the regular retail rate such as a trailer for highway use is traded as part payment on a tractor or other item subject to the reduced 1½% rate, the net difference is taxable at the reduced 1½% rate and the subsequent sale of the trailer for highway use is taxable at the regular retail rate.

35 Miss. Admin. Code Pt. 4, R. 404 Rule 404

Sales under a warranty agreement with the manufacturer are exempt on that part charged to the factory. Any part of the charge made to the customer is taxable at the appropriate rate.

35 Miss. Admin. Code Pt. 4, R. 405 Rule 405

Purchases or sales of parts and labor that are necessary to repair farm equipment in inventory for resale are exempt, since the tax will apply on the sale of the repaired equipment.

35 Miss. Admin. Code Pt. 4, R. 406 Rule 406

Repossessed property will be treated as returned merchandise and credit will be allowed only for the uncollected part of the selling price previously reported. The subsequent sale of the repossessed item will be taxable on the same basis as the sale of new merchandise.

35 Miss. Admin. Code Pt. 4, R. 407 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 500 Exemptions

35 Miss. Admin. Code Pt. 4, R. 501 Rule 501

Retail sales of lint cotton, seed cotton, baled cotton, whether compressed or not, and cottonseed and soybeans in their original condition are exempt.

35 Miss. Admin. Code Pt. 4, R. 502 Rule 502

Sales of seed, vegetable seedlings, livestock feed, poultry feed, fish feed and fertilizer are exempt when sold to anyone and in any amount.

35 Miss. Admin. Code Pt. 4, R. 503 Rule 503

Livestock, fish and poultry feed, which includes hay, silage, beet or citrus pulp, cotton seed hulls, grain, shorts, chops, bran, mash, cottonseed meal or cake, black strap molasses, stock salt (but not table salt), oyster shells, grit and any other feed additive that stimulates growth, is exempt when sold to be used as food for livestock, fish and poultry. Sales of food for dogs, cats, or other pets and deer or wildlife are taxable at the regular retail rate of tax (examples: deer corn, bird feed, etc.).

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35 Miss. Admin. Code Pt. 4, R. 504 Rule 504

Sales of defoliants, insecticides, fungicides, herbicides and baby chicks are exempt when they are to be used in growing agricultural and forestry products for market. When sold for use on lawns or home gardens, such retail sales are taxed at the regular retail rate.

35 Miss. Admin. Code Pt. 4, R. 505 Rule 505

Sales of bagging and ties for baling cotton, hay baling wire and twine, boxes, crates, bags and cans are exempt from tax when made to persons for use in growing or preparing agricultural products for market when possession thereof passes to the customer at the time of sale of the product contained therein.

35 Miss. Admin. Code Pt. 4, R. 506 Rule 506

Sales of ice to commercial fishermen purchased for use in the preservation of seafood or to producers for use in the refrigeration of vegetables for market are exempt. This does include the sale of dry ice.

35 Miss. Admin. Code Pt. 4, R. 507 Rule 507

Sales of farm products (other than ornamental plants which bear no fruit of commercial value) by the producer, except when sold by the producer through an established place of business are exempt. This includes Christmas trees, hay, straw, fresh cut flowers and similar products when grown in Mississippi and cut, severed or otherwise removed from the farm, grove, garden or other place of production and first sold from such place of production in the original state or condition of preparation of sale.

35 Miss. Admin. Code Pt. 4, R. 508 Rule 508

A sale of ingredients to a manufacturer of livestock or poultry feed for sale is exempt.

35 Miss. Admin. Code Pt. 4, R. 509 Rule 509

Retail sales of mules, horses, honey bees and other livestock are exempt.

35 Miss. Admin. Code Pt. 4, R. 510 Rule 510

Sales of all antibiotics, hormones and hormone preparations, drugs, medicines and other medications including serums and vaccines, vitamins, minerals or other nutrients for use in the production and growing of fish, livestock, honey bees and poultry by whomever sold is exempt. Such exemption will be in addition to the exemption provided for feed for fish, livestock, honey bees and poultry.

35 Miss. Admin. Code Pt. 4, R. 511 Rule 511

Sales of food products and honey that are grown, made or processed in Mississippi and sold from farmers’ markets that have been certified by the Mississippi Department of Agriculture and Commerce are exempt.

35 Miss. Admin. Code Pt. 4, R. 512 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 600 Cooperatives

35 Miss. Admin. Code Pt. 4, R. 601 Rule 601

Cooperative Associations are liable for sales tax on the same basis as other taxpayers, except that sales of agricultural products produced by members that have not been subjected to any manufacturing process are exempt. Sales of ice cream, pasteurized milk, butter and the like are therefore taxable at the regular retail rate of tax.

35 Miss. Admin. Code Pt. 4, R. 602 Rule 602

Sales tax also applies on gross income from compressing and storing cotton, custom meat processing and other services as listed under Miss. Code Ann. Section 27-65-23.

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35 Miss. Admin. Code Pt. 4, R. 603 Rule 603

Purchases by agricultural cooperatives for their own use are taxable at the regular retail rate of sales or use tax. Purchases of merchandise for resale by licensed retail agricultural cooperatives are exempt from sales or use tax. Purchases of manufacturing or processing machinery and machine parts for use in manufacturing a commodity for sale or rental are taxable at the 1½% reduced rate of tax.

35 Miss. Admin. Code Pt. 4, R. 604 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 700 Cotton Gins

35 Miss. Admin. Code Pt. 4, R. 701 Rule 701

Sales and Barter. The exchange of cottonseed meal and hulls for cottonseed is considered an exempt sale of livestock feed. Sales of any other property, unless specifically exempt, are taxable at the regular retail rate of tax.

35 Miss. Admin. Code Pt. 4, R. 702 Rule 702

Sales or purchases of machinery and machine parts which are to be used directly in the ginning process are taxable at the reduced 1½% rate of tax. Forklift trucks used directly in the ginning process are considered to be manufacturing machinery.

35 Miss. Admin. Code Pt. 4, R. 703 Rule 703

Purchases of electricity and other fuels for operation of cotton gins are exempt from sales tax. Bagging and ties for baling cotton are exempt from sales or use tax. Other purchases of materials and services are taxable at the regular retail rate of tax.

35 Miss. Admin. Code Pt. 4, R. 704 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 800 Cotton Compresses

35 Miss. Admin. Code Pt. 4, R. 801 Rule 801

The regular retail rate of sales tax applies on the following income accounts of cotton compresses (only if service is performed at cotton compresses and is not a pass through charge from cotton gins): compression, flat delivery, storage, weighing, lining, sampling, patching, branding or markings handling, cotton sold for charges and insurance. If the insurance charge is shown, then the corresponding insurance expense is a deductible item.

35 Miss. Admin. Code Pt. 4, R. 802 Rule 802

The following income accounts are exempt from sales tax: bagging, band, loose cotton and sweepings, patches and financial income such as interest on investments. Charges made directly to agencies of the United States Government or the State of Mississippi for storage of property owned by them may also be excluded from taxable gross income.

35 Miss. Admin. Code Pt. 4, R. 803 Rule 803

Purchases of permanent bale tags by cotton compresses are exempt from sales tax. Purchases of marking figures and strips, rivets and twine are likewise exempt when used as bagging and ties.

35 Miss. Admin. Code Pt. 4, R. 804 Rule 804

Purchases of electricity and other fuels for operation of cotton compresses are exempt from sales tax.

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35 Miss. Admin. Code Pt. 4, R. 805 Rule 805

Purchases of manufacturing machinery, repairs and parts (band cutters, band slicers, band rollers, lift trucks, riveting machines and other processing machines) used directly in the processing operation are taxable at the reduced 1½% rate of sales or use tax.

35 Miss. Admin. Code Pt. 4, R. 806 Rule 806

Purchases of all other equipment and supplies (building materials, car door openers, car loaders, conveyors, cotton hooks, fire extinguishers, hand trucks, janitorial supplies, office supplies, cotton receipts, sampling machines, scales, trailers, oil, graphite, etc.) are taxable at the regular retail rate of sales or use tax.

35 Miss. Admin. Code Pt. 4, R. 807 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 900 Records

35 Miss. Admin. Code Pt. 4, R. 901 Rule 901

Adequate records must be maintained to substantiate tax classifications of sales and purchases.

35 Miss. Admin. Code Pt. 4, R. 902 (Reserved)

35.IV.08.02 revised effective April 1, 2018.

Subpart 9 Food and Beverage Chapter 01 Soft Drinks 100 "Soft Drinks" and "Syrup" include: 1. All beverages that are enclosed or sealed in glass, metal or any other type of container, such as Coca Cola, Sprite, Dr. Pepper, 7-Up, R C Cola, ginger ale, Canada Dry, Shasta, soda water, carbonated water, Capri Sun, Gatorade, Hi C, Hawaiian Punch, limeade, lemonade, orangeade, artificial fruit juice, tea, chocolate drink and similar items. 2. Syrup of Coca Cola, Pepsi Cola, Chocolate, Dr. Pepper, Tab and other syrup preparations for use in making soft drinks by the seller.

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

Retail sales of canned or bottled beverages are taxable at the five percent (5%) rate of sales tax, effective July 1, 2025. Items purchased with Supplemental Nutrition Assistance Program (SNAP) benefits will continue to remain exempt from sales tax. Items that are not eligible to be purchased with SNAP benefits include, but are not limited to, fountain drinks, hot coffee, and other beverages for immediate consumption, which will remain taxable at seven percent (7%). No tax is due on bottle deposits.

35 Miss. Admin. Code Pt. 4, R. 102 Rule 102

Soft drinks and syrup withdrawn by a manufacturer for sale at retail and food and drink withdrawn by a manufacturer or wholesaler to be sold through full-service vending machines are defined as wholesale sales.

35 Miss. Admin. Code Pt. 4, R. 103 Rule 103

"Value" is determined by adding all costs, expenses and a reasonable profit of the merchandise at the time the merchandise is withdrawn from inventory. Value must include direct labor and energy, apportioned administrative expenses and any other cost incurred

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in manufacturing the product for sale. In no instance shall value be less than the least selling price of like merchandise.

35 Miss. Admin. Code Pt. 4, R. 104 Rule 104

As compensation for the timely filing of returns and payment of the tax, a 2% vendor discount may be claimed on retail tax. No discount is authorized on any other wholesale rates of tax.

35 Miss. Admin. Code Pt. 4, R. 105 Rule 105

The sale or rental of soft drink vending machines will not be taxed when an offsetting sales or use tax has been paid on the cost of the property by the owner.

35 Miss. Admin. Code Pt. 4, R. 106 Rule 106

Sales of soft drinks through vending machines under a "full-service sales" agreement are exempt from sales tax. "Full-service sales" are those that are made through vending machines in which the vendor places the drinks, takes the money and pays the location owner a space rental fee. Bottlers, wholesalers, distributors, etc. withdrawing soft drinks and syrup from inventory for sale through full-service vending machines must remit an eight percent (8%) wholesale tax on total value when placed into the vending machine for sale. The gross proceeds of retail sales made through such vending machines are exempt from sales tax. The tax liability accrues to the wholesaler at the time of withdrawal and should be remitted to the State with the same report and in the same manner as any other sales tax liability.

35 Miss. Admin. Code Pt. 4, R. 107 Rule 107

Purchases by bottlers of raw materials (carbon dioxide gas, syrups, acids, flavoring, water softeners) that become components of drinks are exempt from sales or use tax. Purchases of containers, packaging and shipping materials to accompany goods sold (bottles, cans, crowns, cartons, cases) are likewise exempt from sales and use tax. Electric power or other fuel, bottling machinery and machinery parts used directly in the bottling process are taxable at the reduced one-and-one-half percent (1½%) rate of tax. Purchases of cleaning materials and supplies (acid for cleaning soakers, anhydrous ammonia and refrigerants, calcium chloride, caustic soda, soaps, sulfuric acid, chlorine and disinfectants, stationery, etc.) are taxable at the regular retail rate of tax. Purchases of all other equipment and supplies (advertising and sales promotion materials, signs, case conveyors, coolers and parts, hand trucks, lift trucks, skids, uniforms, vending machines etc.) are likewise taxable at the regular retail rate of tax.

35 Miss. Admin. Code Pt. 4, R. 108 Rule 108

Adequate records must be maintained to substantiate tax classifications of sales and purchases.

35 Miss. Admin. Code Pt. 4, R. 109 Rule 109

Rental or lease of tangible personal property to bottlers is taxed at the same rates as sales of the same property.

35 Miss. Admin. Code Pt. 4, R. 110 Rule 110

Use tax is payable monthly directly to the Department of Revenue, if not collected by the seller. In computing the use tax liability, all charges made by the seller related to the purchase must be added to the cost of the property. The taxpayer discount applies for timely payments.

35 Miss. Admin. Code Pt. 4, R. 111 (Reserved)

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35.IV.9.01 revised effective August 3, 2026

Chapter 02 Beverage and Food Businesses

35 Miss. Admin. Code Pt. 4, R. 100 General

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

The gross proceeds of sales by restaurants, cafes, cafeterias, snack bars, drive-ins, beer parlors, lounges, night clubs, concessions, caterers or other vendors of beverages and food products are taxable at the regular retail rate of tax.

35 Miss. Admin. Code Pt. 4, R. 102 Rule 102

Retail sales of groceries are taxable at the five percent (5%) rate of sales tax, effective July 1, 2025. The term “groceries” refers to food or drink for human consumption that is eligible to be purchased with Supplemental Nutrition Assistance Program (SNAP) benefits. Groceries do not include hot or heated food items such as rotisserie chicken, plate lunches, and other hot or cold prepared foods for immediate consumption, which will remain taxable at seven percent (7%). Items purchased with SNAP benefits will continue to remain exempt from sales tax.

35 Miss. Admin. Code Pt. 4, R. 103 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 200 Gross Proceeds of Sales

35 Miss. Admin. Code Pt. 4, R. 201 Taxable gross proceeds include receipts from:

Admissions, minimum and cover charges for entertainment; 2. Sales of tangible personal property; 3. Service charges; and 4. Vending machine sales (except full-service vending machines)

35 Miss. Admin. Code Pt. 4, R. 202 Rule 202

Gratuities or tips specifically added as such on the ticket to the cost of the meal, with the entire proceeds of the indicated gratuity going to the employee of the restaurant, shall be considered in the same light as gratuities paid directly to the employee and are not considered to be taxable income subject to sales tax.

35 Miss. Admin. Code Pt. 4, R. 203 Rule 203

The value of merchandise withdrawn from stock for consumption or any other use by the owner shall be included in gross proceeds of sales taxable at the regular retail rate.

35 Miss. Admin. Code Pt. 4, R. 204 Rule 204

The value of employee meals prepared by a restaurant and provided at no charge to employees of the restaurant is not included in the restaurant’s taxable gross proceeds of sales. Restaurants that are operated as a part of a hotel, casino, hospital or other place of business cannot include employee meals provided to employees working in other areas of the operation.

35 Miss. Admin. Code Pt. 4, R. 205 Rule 205

The value of meals prepared by a restaurant and donated to a charitable organization

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exempt from federal income tax under IRC Section 501(c) (3) that regularly provides food to the needy and the indigent is not included in the restaurants’ taxable gross proceeds of sales as provided for in Miss. Code Ann. Section 27-65-3(h). 206 Food service companies who operate restaurants or cafeterias are to include any underwriting, management or other fees paid by the client. Clients, who underwrite or discount meals to their employees and for whom the food service company serves as an agent for food service operations, may obtain a business license for the food service operation and pay the regular retail sales tax on the greater of (a) the meal charges to employees or (b) the cost to the employer of all purchases utilized in the food service operation, with employer costs for food preparation or food service management being expressly excluded from the computation of purchases. This sales tax treatment shall apply regardless of who is the food service operator as long as an agency relationship exists between the client/employers and the food service operator.

35 Miss. Admin. Code Pt. 4, R. 207 Rule 207

Food sold to schools or students as regular student meals is exempt from sales tax pursuant to Miss. Code Ann. Section 27-65-9(2)(a) and (b). Food served at banquets and luncheons for student groups is exempt from sales tax when the meal is paid for directly by the exempt entity. Food sold by or through school cafeterias and dining halls to non-students such as faculty members, employees, visitors and the public is subject to sales tax. Additional information concerning food sales at schools, colleges and universities can be found in Title 35, Part IV, Subpart 13, Chapter 2 of the Mississippi Administrative Code.

35 Miss. Admin. Code Pt. 4, R. 208 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 300 Purchases

35 Miss. Admin. Code Pt. 4, R. 301 Rule 301

Purchases of equipment, fixtures, supplies and advertising materials that are used or consumed in the operation of the business are taxable at the regular retail rate of sales or use tax. Examples include soap, washroom supplies, cleaning materials, reusable napkins or dishes, etc.

35 Miss. Admin. Code Pt. 4, R. 302 Rule 302

Purchases of merchandise that become a part of products resold are exempt from sales tax. Examples include salt, pepper, flour, shortening, cooking oil, etc.

35 Miss. Admin. Code Pt. 4, R. 303 Rule 303

Purchases of non-reusable products that accompany food or beverage products sold are exempt from sales tax. Examples include paper or plastic napkins, plates, cups, knives, forks, spoons, wrapping paper, boxes, etc.

35 Miss. Admin. Code Pt. 4, R. 304 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 400 Reporting Requirements

35 Miss. Admin. Code Pt. 4, R. 401 Rule 401

Adequate records must be maintained to substantiate tax classifications of sales and

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purchases.

35 Miss. Admin. Code Pt. 4, R. 402 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 500 Local and Private Levies

35 Miss. Admin. Code Pt. 4, R. 501 Rule 501

Additional local levies may be applicable to sales by restaurants depending on where the restaurants are located in this state. The local tax shall be invoiced and collected as a separate levy.

35 Miss. Admin. Code Pt. 4, R. 502 Rule 502

The local levy is due on the same basis as the sales tax and is levied on the sale of prepared foods. Additionally, some local levies may also include the sale of beer and/or alcoholic beverages.

35 Miss. Admin. Code Pt. 4, R. 503 Rule 503

Restaurants are defined as any place where prepared food and beverages are sold for consumption, whether the food and beverages are consumed on the premises or not. Restaurants do not include any school, hospital, convalescent or nursing home, or any restaurant-like facility operated by or in connection with a school, hospital, medical clinic, or convalescent or nursing home providing food for students, patients, visitors or their families.

35 Miss. Admin. Code Pt. 4, R. 504 Rule 504

The term “prepared food” includes: 1. Food made to order upon the customer’s request; 2. Food sold in a heated state or heated by the seller; 3. Two or more food ingredients mixed or combined by the seller for sale as a single item, but not including food that is only cut, repackaged, or pasteurized by the seller, and eggs, fish, meat, poultry, and foods containing these raw animal foods requiring cooking by the consumer as recommended by the Food and Drug Administration to prevent food borne illnesses: and 4. Food sold with eating utensils “provided by the seller,” including plates, knives, forks, spoons, glasses, cups, napkins, or straws. Eating utensils provided at no charge to a customer with the purchase of a food item that remains in its original container packaged by the manufacturer is not considered prepared food. This includes items such as a cup of yogurt provided with a spoon.

35 Miss. Admin. Code Pt. 4, R. 505 Rule 505

Any person who holds a valid direct pay permit cannot use such permit to cover any local levy. All taxes due from any of the local levies must be paid at the time of purchase and cannot be remitted on a use tax return through the use of a direct pay permit.

35 Miss. Admin. Code Pt. 4, R. 506 Rule 506

(Reserved) 35.IV.9.02 revised effective August 8, 2025 Chapter 03 Ice Sales and Ice Manufacturers

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35 Miss. Admin. Code Pt. 4, R. 100 Sales

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

The gross proceeds of sales of bagged or block ice are taxable at the five percent (5%) rate of sales tax; however, sales of ice made to a licensed retailer for resale are wholesale sales and not subject to sales tax.

35 Miss. Admin. Code Pt. 4, R. 102 Rule 102

Sales of ice to be used as a refrigerant in grocery stores, service stations, hotels (except hotel restaurants), creameries, and beer parlors are taxable at the regular retail rate of tax. Sales of ice to railroad and trucking companies for the purpose of icing interstate or intrastate shipments, or sales to industrial users are considered as sales for consumption and are taxable at the regular retail rate.

35 Miss. Admin. Code Pt. 4, R. 103 Rule 103

Sales of ice to commercial fishermen purchased for use in the preservation of seafood are exempt from sales tax pursuant to Miss. Code Ann. Section 27-65-103(a).

35 Miss. Admin. Code Pt. 4, R. 104 Rule 104

Sales of ice to manufacturers, retailers or processors for use in packing a product for preservation or shipment or when used directly in processing are exempt from sales tax pursuant to Miss. Code Ann. Sections 27-65-5(3) and 27-65-101(a) and (b). Examples of such usage would be ice used by meat packers in making sausage or in processing chickens or by a bakery in making bread. Sales of ice to producers for use in the refrigeration of vegetables for market are also exempt.

35 Miss. Admin. Code Pt. 4, R. 105 Rule 105

Sales of other tangible personal property by ice plants such as ice boxes, fruits, vegetables, produce or any other commodities are taxable at the regular retail rate with no deductions allowed for delivery charges or expenses. Sales of these items to licensed retailers for resale are wholesale sales and are not subject to the sales tax.

35 Miss. Admin. Code Pt. 4, R. 106 Rule 106

Sales of ice vending machines, ice makers and other similar equipment to cafes, hotels, motels, service stations, etc., are taxable at the regular retail rate of sales or use tax.

35 Miss. Admin. Code Pt. 4, R. 107 Rule 107

Charges for public storage are taxable at the regular retail rate pursuant to Miss. Code Ann. Section 27-65-23. Charges for public storage of goods that are temporarily stored in this state pending shipping or mailing of the property to another state are exempt from tax.

35 Miss. Admin. Code Pt. 4, R. 108 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 200 Purchases

35 Miss. Admin. Code Pt. 4, R. 201 Rule 201

Ice manufacturers are required, with certain exceptions, to obtain a direct pay permit as provided by Miss. Code Ann. Section 27-65-93. The direct pay permit shall be used to report and remit the applicable sales and use tax due on all purchases of tangible personal property, utilities and services directly to the state in lieu of payment to the vendor.

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35 Miss. Admin. Code Pt. 4, R. 202 Rule 202

Owners of self-contained ice manufacturing/dispensing houses will not be issued a direct pay permit. The ice h o u s e owner may apply to the Department for a letter authorizing water utility companies to sell water used as a raw material exempt from sales tax and authorizing electricity utility companies to sell electricity used in the ice house exempt.

35 Miss. Admin. Code Pt. 4, R. 203 Rule 203

Purchases by ice manufacturers of shipping materials (bags, twine, etc.) to accompany goods sold where possession passes to the customer are exempt from sales or use tax pursuant to Miss. Code Ann. Section 27-65-101(a).

35 Miss. Admin. Code Pt. 4, R. 204 Rule 204

Raw materials (water) and processing chemicals (ammonia) used in manufacturing ice are exempt from tax pursuant to Miss. Code Ann. Section 27-65-101(b). Water must be separately metered from any other usage.

35 Miss. Admin. Code Pt. 4, R. 205 Rule 205

Purchases of electrical power or other fuels used directly in the manufacturing process are exempt while manufacturing machinery or machine parts used directly in the manufacturing process are taxable at the reduced one-and-one-half percent (1½%) rate of tax.

35 Miss. Admin. Code Pt. 4, R. 206 Rule 206

Purchases of self-contained ice manufacturing/dispensing houses are taxable at the reduced one-and-one-half percent (1½%) rate of tax only on that portion of the purchase price that is directly involved in the manufacturing of the ice. The remaining portion of the purchase price will be taxable at the regular retail rate of tax. Adequate records must be maintained to substantiate the portion of the purchase price that is related to the manufacturing components of the ice house.

35 Miss. Admin. Code Pt. 4, R. 207 Rule 207

Purchases of all other equipment and supplies (ice picks, hooks, delivery bags not sold with ice, etc.) are taxable at the regular retail rate of tax.

35 Miss. Admin. Code Pt. 4, R. 208 Rule 208

Rental or lease by ice manufacturers of tangible personal property is taxed at the same rates as sales of the same property.

35 Miss. Admin. Code Pt. 4, R. 209 (Reserved)

35.IV.9.03 revised effective August 8, 2025

Chapter 04 Milk Products

35 Miss. Admin. Code Pt. 4, R. 100 Rule 100

“Dairy Producer” means any person engaged in the production of milk for commercial use.

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

Sales of milk or milk products to consumers are taxable at the regular retail rate of tax.

35 Miss. Admin. Code Pt. 4, R. 102 The following types of sales are exempt from sales tax:

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Sales of raw milk, skimmed milk or cream by a dairy producer before the products are subjected to any other process. Sales tax is due when such products are sold at an established store. 2. Sales of raw milk, skimmed milk or cream by an agricultural cooperative, when such products are produced by its members, and before the products are subjected to any other process. 3. Sales to licensed dealers or retailers for resale or to manufacturers for further processing.

35 Miss. Admin. Code Pt. 4, R. 103 Rule 103

Dairy producers are liable for regular retail sales or use tax on the purchase price of all equipment, machines and supplies. Purchases of containers such as milk bottles, cartons, wax for cartons and caps are exempt as containers when preparing agricultural products for market when possession passes to the customer at the time of sale of the product contained therein. Mechanical milking machines, milk tanks and coolers are taxed at the 1.5% special rate of tax as farm implements. All other taxable items are taxed at the regular retail rate.

35 Miss. Admin. Code Pt. 4, R. 104 Rule 104

Sales of materials to a dairy producer used in the repair, renovation or addition to, expansion and/or improvement of buildings or related facilities shall be taxed at the 3.5% special rate.

35 Miss. Admin. Code Pt. 4, R. 105 Rule 105

Producers who pasteurize milk or manufacturers of milk products are exempt on purchases of containers that will be sold with the milk or manufactured product. Purchases of manufacturing machinery or parts that will be used directly in manufacturing or processing milk products for sale are subject to the 1.5% special rate of sales or use tax. Purchases of electric power or other fuel used in manufacturing or processing milk products for sale are exempt. See Title 35 Miss. Admin. Code, Part IV, Subpart 6, Chapter 01 concerning the Affidavit for Utility Exemption. All other purchases of equipment, machinery or supplies are subject to the regular retail rate of sales or use tax.

35 Miss. Admin. Code Pt. 4, R. 106 Rule 106

Rental or lease of machinery and other tangible personal property is taxed at the same rate as sales of the same property.

35 Miss. Admin. Code Pt. 4, R. 107 Rule 107

Adequate records must be maintained to substantiate tax classifications of sales and purchases.

35 Miss. Admin. Code Pt. 4, R. 108 (Reserved)

35.IV.9.04 revised effective December 1, 2020

Chapter 05 Bakeries

35 Miss. Admin. Code Pt. 4, R. 100 Rule 100

Bakeries doing primarily a wholesale business are considered as manufacturers. Bakery activities carried on by a retailer in connection with a catering service, cafe, delicatessen or pastry shop, are not in this manufacturing class, but are subject to the tax and any special tax levy as applicable to food and beverage business.

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35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

Sales by bakeries to consumers are retail transactions taxable at the regular retail rate of tax. Sales to other manufacturers, wholesalers or licensed retailers for resale are exempt.

35 Miss. Admin. Code Pt. 4, R. 102 Rule 102

Sales of manufacturing machinery or machine parts to bakeries for use directly and exclusively in manufacturing bakery products are taxable at the 1½% special rate of tax. Sales of raw materials and packaging materials used to package bakery products for sale are exempt from tax. Sales of electric power or other fuels to bakeries for use directly in the manufacturing process are exempt from sales tax. See Title 35 Miss. Admin. Code, Part IV, Subpart 6, Chapter 01 concerning the Affidavit for Utility Exemption.

35 Miss. Admin. Code Pt. 4, R. 103 Rule 103

Sales of other supplies and equipment to a baker for use and consumption, such as the following, are taxable at the regular retail rate of sales or use tax: 1. Advertising materials and signs 2. Bread trays 3. Display equipment 4. Fans and ventilating equipment 5. Furniture and fixtures 6. Garbage disposal equipment 7. Janitorial supplies and equipment 8. Office supplies and equipment 9. Shelves and buns 10. Trade books 11. Uniforms, aprons, caps, etc. 12. Utensil racks 13. Vending carts and trucks 14. Washroom supplies

35 Miss. Admin. Code Pt. 4, R. 104 Rule 104

Adequate records must be maintained to substantiate tax classification of sales and purchases.

35 Miss. Admin. Code Pt. 4, R. 105 (Reserved)

35.IV.09.05 revised effective March 6, 2020

Sub Part 10 Construction and Oil Field

Chapter 01 Construction Contractors

35 Miss. Admin. Code Pt. 4, R. 100 Definitions

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

The terms “contractor” and “prime contractor” mean a person entering into an agreement, either verbal or written, with the owner of a project to perform such work as is described in the following paragraphs. A person may not contract with himself.

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35 Miss. Admin. Code Pt. 4, R. 102 Rule 102

A “subcontractor” is a person entering into an agreement with a prime contractor or other subcontractor to perform work required under the prime contract.

35 Miss. Admin. Code Pt. 4, R. 103 Rule 103

A person entering into an agreement, or “management contract”, on a fee basis is not considered a prime contractor when such person acts as a liaison between the owner of the project and the various contractors who are hired and paid directly by the owner.

35 Miss. Admin. Code Pt. 4, R. 104 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 200 Qualification and Payment of Tax

35 Miss. Admin. Code Pt. 4, R. 201 Rule 201

A contractor, other than an oil or a gas well driller, taxable under Miss. Code Ann. Section 27-65-21 shall apply to the Commissioner for a Material Purchase Certificate (MPC) identifying the specific contract before work is begun. Contracts for residential construction are not taxable under Miss. Code Ann. Section 27-65-21 and do not qualify for an MPC.

35 Miss. Admin. Code Pt. 4, R. 202 Rule 202

The contractor's tax, together with any use tax due, must be paid before work is begun on any contract exceeding $75,000, unless a bond is filed with the Department of Revenue. Bond forms are made available on request.

35 Miss. Admin. Code Pt. 4, R. 203 Rule 203

On taxable contracts between $10,000 and $75,000, or when a bond is required to be filed, the tax must be paid on a monthly basis as compensation is received regardless of a contractor’s sales tax filing status. Any use tax due on equipment shall be paid on or before the 20th day of the month following the month in which the property is brought into Mississippi.

35 Miss. Admin. Code Pt. 4, R. 204 Rule 204

Persons or firms without a permanent place of business within Mississippi are required to qualify and pay the 3½% contractor's tax and any use tax due on the total contract amount before work is begun, unless a bond is filed as provided by Miss. Code Ann. Section 27- 65-27 in an amount sufficient to cover these taxes.

35 Miss. Admin. Code Pt. 4, R. 205 Rule 205

The tax is levied upon the prime contractor. Subcontractors who perform work on a qualified prime contract owe no tax on the subcontract price or gross income unless the prime contractor fails to pay the tax due. A subcontractor may want to request a copy of the MPC from the prime contractor. Should the prime contractor fail to qualify the contract and pay the amount of tax due, the subcontractor is liable for the contractor's tax on that portion of the work sublet to him.

35 Miss. Admin. Code Pt. 4, R. 206 Rule 206

The 2% taxpayer discount is not allowed on sales tax imposed and levied by Miss. Code Ann. Section 27-65-21 (contractor's tax).

35 Miss. Admin. Code Pt. 4, R. 207 Rule 207

Failure to comply with the requirements to obtain an MPC before work begins, prepay contractor’s and use taxes or obtain a bond shall result in the contractor being prohibited from performing the contract until such requirements are met.

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35 Miss. Admin. Code Pt. 4, R. 208 Rule 208

A ten percent (10%) penalty is due on all deficiencies. Deficiencies include failure to post a bond or prepay the tax in full on all contracts requiring the posting of a bond or prepayment of tax before work has begun. This penalty is based on the total amount of tax due on the total contract price. A ten percent (10%) penalty is also due on the tax applicable to monthly compensation not reported timely on subsequent returns.

35 Miss. Admin. Code Pt. 4, R. 209 Rule 209

There will not be a 10% penalty on the same deficiency more than once. Any portion of tax related to compensation that was penalized as a failure to post a bond or prepay the tax in full on contracts before the work was begun will not also be subject to a 10% penalty on the late remittance of monthly returns. Any portion of tax related to the late remittance of monthly returns that was penalized will not also be subject to a 10% penalty for failure to post a bond or prepay the tax of a contract.

35 Miss. Admin. Code Pt. 4, R. 210 Rule 210

In the instance a contractor or subcontractor incorrectly uses an MPC number to purchase non-component materials or services, and it is determined by the Commissioner that there is intentional disregard of the law or done with intent to defraud, there will be a fifty percent (50%) penalty assessed. This penalty will be used when the contractor or subcontractor misuses an MPC number or when an audit of taxpayer records reveals an attempt to disguise or hide the misuse of an MPC number. This penalty will not be assessed if the taxpayer can prove reasonable cause for failure to comply.

35 Miss. Admin. Code Pt. 4, R. 211 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 300 Activities Taxed and Application of Rates

35 Miss. Admin. Code Pt. 4, R. 301 Rule 301

A tax of 3½% is levied on the total contract amount or compensation received from all contracts, except contracts for residential construction, that exceed $10,000 when the work to be performed is constructing, building, erecting, repairing, grading, excavating, drilling, exploring, testing or adding to any of the following: 1. Air conditioning system 2. Bridge 3. Building 4. Culvert 5. Dam 6. Dock 7. Drainage or dredging system 8. Electrical system 9. Heating system 10. Highway 11. Irrigation or water system 12. Levee or levee system 13. Oil or gas well 14. Pipeline 15. Power plant 16. Railway 17. Reservoir 18. Sewer

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Sidewalk 20. Storage tank 21. Street 22. Tower 23. Transmission line 24. Water well 25. Wharf 26. Wiring for communication or information systems 27. Any other improvement or structure or any part thereof (fences, etc.)

35 Miss. Admin. Code Pt. 4, R. 302 Rule 302

The tax is levied on contracts with the United States Government, the State of Mississippi and its political subdivisions and any other exempt agency, without any deduction for amounts paid to subcontractors, architects, engineers, landscapers or for any other costs or expenses (including the 3½% contractor’s tax) incurred by the contractor. Liquidated damages that are withheld by the owner are not to be included in taxable contract receipts.

35 Miss. Admin. Code Pt. 4, R. 303 Rule 303

The portion of the total contract price attributable to design or engineering services is excluded from the contractor’s tax if the total contract price for the project exceeds $100,000,000; or if the engineering services are performed by a professional engineer, as defined in the Miss. Code Ann. Section 73-13-3, who is the general or prime contractor.

35 Miss. Admin. Code Pt. 4, R. 304 Rule 304

A person taxable under Miss. Code Ann. Section 27-65-23 who performs any of the activities listed in section 301 as a prime contractor for compensation in excess of $10,000 shall qualify and pay tax as a contractor in lieu of the tax levied by Miss. Code Ann. Section 27-65-23. Activities so taxed under Miss Code Ann. Section 27-65-23 are: 1. Air conditioning installation or repairs; 2. Electrical work, wiring, and all repairs or installations of electrical equipment; 3. Elevator or escalator installation or repairs; 4. Grading, excavating, ditching, dredging or landscaping; 5. Insulating services or repairs; 6. Plumbing or pipe fitting; 7. Tin and sheet metal work; 8. Welding, etc.

35 Miss. Admin. Code Pt. 4, R. 305 Rule 305

Persons performing any services taxed under Miss. Code Ann. Section 27-65-23 for contracts of $10,000 or less owe the regular retail rate of sales tax on gross income. Persons performing contracts of $10,000 or less that do not include services taxed under Miss. Code Ann. Section 27-65-23 owe no tax on gross income but are required to pay the regular retail rate of sales or use tax on all taxable purchases.

35 Miss. Admin. Code Pt. 4, R. 306 Rule 306

Continuous contracts on projects embracing activities taxable under Miss. Code Ann. Section 27-65-21, which are to be carried on for a definite period of time and a definite amount, will be qualified and taxed at 3½%. Otherwise, the determination of whether a contract is subject to tax under Miss. Code Ann. Section 27-65-21 will be made from purchase orders, work orders or invoices. Purchase orders, work orders or invoices that are a continuation of prior purchase orders, work orders or invoices will be considered part

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of one project. Generally, work on a project takes place in the same, adjacent or adjoining area. Transmission lines (gas, water, sewage, power, telephone, etc.) are considered a project. Amounts included in the contract for non-taxable activities (grass cutting, tree trimming, etc.) may be excluded from the taxable amount of the contract.

35 Miss. Admin. Code Pt. 4, R. 307 Rule 307

Individual contracts for the construction of several buildings, streets, etc., or parts thereof, may together be qualifiable as a prime contract despite the fact that the compensation for each separate part of the project is less than $10,000. In order to determine whether such contracts are qualifiable, consideration must be given to the types of activities involved.

35 Miss. Admin. Code Pt. 4, R. 308 Rule 308

Contracts for the performance of work upon personal property, such as shipbuilding or ship repairing, or activities that consist of demolishing or razing old property or clearing land, are not subject to the provisions of Miss. Code Ann. Section 27-65-21. However, where land clearing or building razing activities are incidental to the primary purpose of the contract, such as highway or building construction, the total contract is taxable. No separation of incidental activity will be allowed even though it may be subcontracted.

35 Miss. Admin. Code Pt. 4, R. 309 Rule 309

Contractor’s tax does not apply to the contract price or compensation received to restore, repair, or replace a utility distribution or transmission system (electric, gas, water, sewage, telephone, etc.) damaged by an ice storm, hurricane, flood, tornado, wind, earthquake or other natural disaster if the entity performing the restoration, repair or replacement is reimbursed for its cost only.

35 Miss. Admin. Code Pt. 4, R. 310 Rule 310

The portion of the contract price or compensation received from the sale and installation of manufacturing or processing machinery that loses its identity as tangible personal property to a manufacturer or a customer processor is to be taxed at the special sales tax rate of 1 ½%.

35 Miss. Admin. Code Pt. 4, R. 311 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 400 Floating Structures

35 Miss. Admin. Code Pt. 4, R. 401 Rule 401

A 3½% tax is levied on the gross proceeds or gross receipts from the sale of any tangible personal property that becomes a component part of any floating structure, or on the performance of any construction activity upon any floating structure (not limited to casinos). These floating structures are located within the waters of the State of Mississippi and are normally moored and not normally engaged in the business of transporting people or property. This tax does not apply to tangible personal property that does not become a component part of the structure. If one contractor is doing both land-based and floating structure construction, this tax may be paid by the contractor; otherwise, the owner of floating structure is responsible for the tax. The owner of a floating structure subject to the 3½% tax will be issued a Casino Construction Project Certificate. The owner will provide the CCPC number to the prime contractors and sub-contractors performing work on the structure. This will allow the component materials and parts used in the construction activities to be purchased exempt from sales tax.

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35 Miss. Admin. Code Pt. 4, R. 402 Rule 402

The owner of a floating structure will also be issued a direct pay number. With the use of the CCPC number and this direct pay number, tax is accrued on the owner’s use tax return and not paid to vendors.

35 Miss. Admin. Code Pt. 4, R. 403 Rule 403

The contractor will be allowed to qualify those contracts involving both land-based and water-based structures that cannot be easily separated, as long as the land-based portion of the contract is in excess of $10,000.

35 Miss. Admin. Code Pt. 4, R. 404 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 500 Material Purchase Certificates and Component Materials

35 Miss. Admin. Code Pt. 4, R. 501 Rule 501

A Material Purchase Certificate is a certificate issued by the Department upon application by a construction contractor with a qualifying contract. Each MPC is assigned an identifying number which relates to a specific contract. Application to the Commissioner for an MPC number is required before work is begun to cover all qualifying commercial, non-residential construction. The MPC number allows the contractor and his subcontractors to make tax-free purchases of materials and services that become a component part of the structure covered by the qualified contract. The MPC number is not applicable to other contracts and expires upon completion of the contract.

35 Miss. Admin. Code Pt. 4, R. 502 Rule 502

The contractor and his subcontractors shall provide their vendors with the MPC number when purchasing component materials. The vendors shall list the MPC number on each sales invoice as a prerequisite to claiming the exemption. Contractors and subcontractors incorrectly using an MPC number to purchase non-component materials or services will be held liable for the applicable sales tax due on their purchases. See Mississippi Department of Revenue vs Hotel and Restaurant Supply 192 So.3d 942. Vendors who incorrectly accept an MPC number to exempt the sale of consumables or services such as rental of construction and related equipment will be liable for the applicable sales tax due.

35 Miss. Admin. Code Pt. 4, R. 503 Rule 503

Component materials are all materials that become an integral part of the structure being erected. Certain taxable services provided under Miss. Code Ann. Section 27-65-23 are also considered to be component to the structure. Component materials may include built- in furniture, fixtures, appliances and similar personal property. For personal property to become real property, it must be permanently attached to real property. To be considered permanently attached, the property must lose its identity as personal property and one or more of the following criteria must be met: 1. The property or equipment must be attached to building walls, floors, and/or ceilings in such way as to require design or structural alterations to the real property to which it is being attached; or 2. The property cannot be removed intact or its removal would result in the alteration or destruction of the structure or property; or 3. The property must become an independent structure, itself (real property).

35 Miss. Admin. Code Pt. 4, R. 504 Rule 504

Non-component material is property that retains its identity as tangible personal property. Free-standing furniture, fixtures, appliances and similar personal property are non-

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component materials. Non-component property may be excluded from the measure of the contractor's tax.

35 Miss. Admin. Code Pt. 4, R. 505 Rule 505

Items that are considered to be non-component materials include, but are not limited to, the following: 1. Awnings 2. Building signage (channel letters, etch) 3. Cellular telephone tower addition (antennas, radio equipment, platforms, etc.) 4. Conveyor system, non-integrated 5. Digital billboard screens 6. Fuel dispensers 7. Generators 8. Gutters 9. Irrigation systems, above the ground 10. Motors 11. Movable bleachers or stadium seating 12. Playground equipment 13. Removable/replaceable pumps 14. Solar panels 15. Walk-in cooler/freezer 16. Water treatment clarifiers, descales and water conditioning/filtration equipment, etc.

35 Miss. Admin. Code Pt. 4, R. 506 Rule 506

The purchase price or sales price of non-component materials is taxed as a withdrawal of stock at the regular seven percent (7%) retail rate and any applicable special tax levy when these items are purchased exempt with an MPC. The sales tax on purchases of non- component materials should be reported on the contractor’s or subcontractor’s Sales Tax return. Any special tax levy should be reported by the contractor or subcontractor on their sales tax return at the applicable rate.

35 Miss. Admin. Code Pt. 4, R. 507 Rule 507

Free-standing personal property sold under a contract with the United States Government, the State of Mississippi and its political subdivisions or any other exempt agency that has been qualified can be purchased tax free. The contractor must apply to the Department for a letter granting the authority to purchase free-standing personal property exempt from tax.

35 Miss. Admin. Code Pt. 4, R. 508 Rule 508

When records and invoices are not kept to substantiate the exemption, sales made to the contractor or subcontractor will be considered retail sales, taxable at the regular retail rate. Contractors with contracts taxable under Miss. Code Ann. Section 27-65-21 who have paid retail sales tax on purchases of materials and services in the state that become a component part of a structure being erected or repaired may take a credit against their sales tax liabilities for the sales tax paid on these purchase after obtaining the MPC for the related project.

35 Miss. Admin. Code Pt. 4, R. 509 Rule 509

A valid MPC number or direct pay permit is required to make an exempt purchase of concrete or asphalt for use in any commercial construction job that is required to be qualified under Miss. Code Ann. Section 27-65-21. All purchases of asphalt or concrete

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for commercial construction jobs less than $10,000 are taxable at the regular retail rate of tax at the time of purchase, unless the purchaser is an exempt entity or provides the seller with a direct pay permit. An exempt entity is one that is exempt from sales tax as provided in Miss. Code Ann. Sections 27-65-101 through 27-65-111. Direct pay permits are issued to taxpayers under the provisions of Miss. Code Ann. Section 27-65-93.

35 Miss. Admin. Code Pt. 4, R. 510 Rule 510

A person with a valid sales tax number who is purchasing concrete to use in the performance of a taxable service is considered the consumer of the concrete and must pay tax to the vendor at the time of purchase. Contractors who mix concrete or asphalt for use in the performance of a job owe sales tax on the value of the concrete or asphalt. Any person purchasing concrete or asphalt from an out-of-state vendor for delivery and use in this state will be liable for remitting use tax on the purchase price of the concrete or asphalt. Any person who mixes concrete or asphalt out of state for delivery and use in this state will be liable for remitting use tax on the value of the concrete or asphalt. The term “vendor”, as used in this section, means the person who is manufacturing or producing the concrete or asphalt from raw materials either at a fixed plant site location, a portable plant or through ready-mix trucks. Materials used to form concrete are not considered component materials and may not be covered by the use of an MPC number.

35 Miss. Admin. Code Pt. 4, R. 511 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 600 Bond Requirement

35 Miss. Admin. Code Pt. 4, R. 601 Rule 601

A bond must be filed on taxable contracts exceeding $75,000 that are performed in this State, unless the tax is prepaid. Persons or firms without a permanent place of business within Mississippi must file a bond on any taxable contract in excess of $10,000, unless the tax is prepaid.

35 Miss. Admin. Code Pt. 4, R. 602 Rule 602

Such bonds shall be either (a) job bonds which guarantee the payment of taxes resulting from the performance of a specified job or activity regardless of date of completion; or (b) blanket bonds which guarantee the payment of taxes resulting from the performance of all jobs or activities taxable under Miss. Code Ann. Section 27-65-21 that are begun during a specified period, regardless of the date of completion. The bond must be sufficient to cover the liability for sales, use, income, withholding and motor fuel taxes and must be approved by the Commissioner.

35 Miss. Admin. Code Pt. 4, R. 603 Rule 603

In lieu of a job or blanket bond, a tax rider, with a copy of a performance and/or payment bond, may be accepted. In order for the tax rider to be accepted, a copy of the performance and/or payment bond for which the tax rider is executed must be on file with the Department.

35 Miss. Admin. Code Pt. 4, R. 604 Rule 604

It is in the discretion of the Department to require that a job bond be filed when making application to the Commissioner for an MPC for continuous and/or maintenance projects. This request must be updated annually along with the submission of proof of continued bonding coverage.

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35 Miss. Admin. Code Pt. 4, R. 605 Rule 605

Where a contractor prepaid the sales tax, but a use, income, withholding or motor fuel tax bond is still required, the contractor will be notified of the bond requirement after an application for a Material Purchase Certificate has been received.

35 Miss. Admin. Code Pt. 4, R. 606 Rule 606

When a contractor defaults ion the execution of his contract and the bonding company acting as surety for the performance of the contract assumes completion of the contract, the bonding company becomes liable for the payment of the sales, use, income, withholding and motor fuel tax accruing as a result of its activities. The contractor’s MPC number becomes void at the time of default. The surety company shall make application to the Commissioner for an MPC covering the remaining/unfinished portion of the contract. The application must include proper bonding and/or prepayment of tax.

35 Miss. Admin. Code Pt. 4, R. 607 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 700 Owner Construction

35 Miss. Admin. Code Pt. 4, R. 701 Rule 701

A person constructing buildings on property he owns is not a contractor and is liable for the retail sales or use tax on all materials or services purchased even though the person may enter into a contract to sell the building and lot (real property) before construction is completed.

35 Miss. Admin. Code Pt. 4, R. 702 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 800 Residential Construction

35 Miss. Admin. Code Pt. 4, R. 801 Rule 801

The contract price or compensation received for constructing, building, erecting, repairing, or adding to any building, electrical system, heating system or any other improvement or structure that is used for or primarily in connection with a residence or dwelling place for human beings is excluded from the 3½% contractor’s tax provided by Miss. Code Ann. Section 27-65-21.

35 Miss. Admin. Code Pt. 4, R. 802 Rule 802

Sales of materials and services for use in residential construction activities are taxed at the regular retail rate of tax provided by Miss. Code Ann. Sections 27-65-17, 27-65-23 and 27- 67-5. Such residences shall include homes, mobile homes, summer cottages, fishing and hunting camp buildings and similar buildings, but shall not include hotels, motels, hospitals, apartments, condominiums, nursing or retirement homes, tourist cottages, military barracks, school dormitories, sorority and fraternity houses, churches or other commercial establishments. An “apartment” is a collection of four or more dwellings on continuous land with kitchen facilities and common ownership that are rented to tenants rather than transient guests. Groups of single family homes do not constitute apartments. A “nursing home”, as the term is used in this section, is any complex that provides any type of assisted living. The caregivers can be either medical or non-medical personnel.

35 Miss. Admin. Code Pt. 4, R. 803 Rule 803

It is in the discretion of the Department to separate out residential housing from a construction contract for nonresidential construction.

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35 Miss. Admin. Code Pt. 4, R. 804 Rule 804

All purchases of concrete and asphalt for residential use are taxable at the regular retail rate of sales tax at the time such materials are purchased from the vendor, unless the purchaser is an exempt entity or provides the seller with a direct pay permit. An exempt entity is one that is exempt from sales tax as provided in Miss. Code Ann. Sections 27-65-101 through 27-65-111. Direct pay permits are issued to taxpayers under the provisions of Miss. Code Ann. Section 27-65-93. A direct pay permit relieves the seller of the responsibility for collecting tax and requires the holder to remit any taxes due on the purchase directly to the state.

35 Miss. Admin. Code Pt. 4, R. 805 Rule 805

A person with a valid sales tax number who is purchasing concrete to use in the performance of a taxable service is considered the consumer of the concrete and must pay tax to the vendor at the time of purchase. Contractors who mix concrete or asphalt for use in the performance of a job owe sales tax on the value of the concrete or asphalt. Any person purchasing concrete or asphalt from an out-of-state vendor for delivery and use in this state will be liable for remitting use tax on the purchase price of the concrete or asphalt. Any person who mixes concrete or asphalt out of state for delivery and use in this state will be liable for remitting use tax on the value of the concrete or asphalt. The term “vendor”, as used in this section, means a person who is mixing concrete or asphalt from raw materials either at a fixed plant site location, a portable plant or through ready-mix trucks.

35 Miss. Admin. Code Pt. 4, R. 806 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 900 Equipment and Supplies

35 Miss. Admin. Code Pt. 4, R. 901 Rule 901

Purchases by contractors and subcontractors of work equipment, tools, building forms, repair parts for work equipment and similar items of tangible personal property that do not become component parts of the structure being erected are taxed at the regular retail rate of sales or use tax and any applicable special tax. When property of this type has been previously used in another state and is imported into this State for use, the use tax is due on the fair market value of the property at the time of importation. At no time shall the value be less than 20% of original cost. Credit for sales or use tax paid to another state in which the property was acquired or used may be taken in computing the amount of use tax due this State. The credit must be computed by applying the rate of sales or use tax paid to another state to the value of the property at the time it enters Mississippi.

35 Miss. Admin. Code Pt. 4, R. 902 Rule 902

Owners or other persons receiving benefit from the use of tangible property in this State are liable for use tax on such property.

35 Miss. Admin. Code Pt. 4, R. 903 Rule 903

The rental or lease of equipment and other tangible personal property is taxed at the same rates as a sale of the same property.

35 Miss. Admin. Code Pt. 4, R. 904 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 1000 Persons or Firms Domiciled Outside the State

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35 Miss. Admin. Code Pt. 4, R. 1001 Rule 1001

Persons or firms domiciled outside Mississippi who perform contracts in Mississippi are construed to be doing business within the State and are subject to the various provisions of the Sales and Use Tax Laws, the Income and Withholding Tax Laws, the Franchise Tax Laws and the Motor Fuel Tax Laws in the same manner as are resident taxpayers.

35 Miss. Admin. Code Pt. 4, R. 1002 (Reserved)

35.IV.10.01 revised effective April 1, 2018.

Chapter 02 Drilling Contractors (Oil and Gas Wells)

Definitions

35 Miss. Admin. Code Pt. 4, R. 100 Rule 100

Definitions. Certain words, terms and phrases used in this regulation have meanings ascribed to them as follows: 1. Interest Well. When the driller owns a portion of the lease and one or more other persons own the remaining portion upon which a well is drilled, such a joint leasehold is known as an "interest well". 2. Ownership Well. When a drilling contractor owns 100% of a lease and drills a well on it, he has no taxable income. 3. Operator. One who holds all or a fraction of the working or operating rights in an oil or gas lease, and is obligated for the costs of production either as a fee owner or under a lease or any other form of contract creating working or operating rights. 4. Bottom-Hole Contribution. Money or property given to an operator for his use in the drilling of a well on property in which the payor has no interest. The contribution is payable whether the well is productive or nonproductive. 5. Dry-Hole Contribution. Money or property given to an operator for his use in the drilling of a well on property in which the payor has no interest. Such contribution is payable only in the event the well is found to be nonproductive. 6. Total Contract Price or Compensation Received. Amounts received as compensation for performing a drilling contract, including assignments of dry-hole or bottom-hole contributions and anything else of value. When the kind and amount of compensation received by the contractor is contingent upon production, the compensation received shall be the total compensation receivable in the event the well is a dry-hole. 7. a. Taxable Compensation. In determining "taxable compensation", certain items are deductible from the "compensation received" when the regular retail tax or, if applicable, the contractor’s tax (road construction, site preparation, etc.) has been paid by the contractor to the person making the sale or rendering the service and as enumerated below: i. Additives ii. Casing iii. Cement iv. Coring v. Directional Drilling vi. Fishing tool rentals vii. Logging

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viii. Mud ix. Perforation x. Road Construction xi. Site preparation xii. Testing xiii. Water b. No other expenses or cost incurred by the driller in the drilling operation is excludable in determining "taxable compensation".

35 Miss. Admin. Code Pt. 4, R. 101 (Reserved)

Qualifications and Payment of Tax

35 Miss. Admin. Code Pt. 4, R. 200 Rule 200

Qualifications and Payment of Tax. A drilling contractor taxable under Section 27-65-21 on a specified contract exceeding $10,000 shall qualify with the State Tax Commission to identify the specific contract before work is begun.

35 Miss. Admin. Code Pt. 4, R. 201 Rule 201

The contractor's tax together with any use tax due must be paid before work is begun on contracts exceeding $75,000 unless a surety bond is filed with the State Tax Commission for these taxes (Section 27-65-21). (See "Bond Requirement".)

35 Miss. Admin. Code Pt. 4, R. 202 Rule 202

On taxable contracts of $75,000 or less, or when a bond is filed, the tax due under Section 27-65-21 must be paid on a monthly basis as compensation is received. Any use tax on equipment shall be payable on or before the twentieth (20th) day of the month following the month in which the property is brought into Mississippi.

35 Miss. Admin. Code Pt. 4, R. 203 Rule 203

The 2% vendor's discount does not apply to the tax levied under Section 27-65-21.

35 Miss. Admin. Code Pt. 4, R. 204 (Reserved)

Tax Rates and Activities Taxed

35 Miss. Admin. Code Pt. 4, R. 300 Rule 300

Tax Rates and Activities Taxed. A tax of 3½% is levied on the "taxable compensation" received when the contract price exceeds $10,000 for drilling, redrilling, directional drilling or working over a gas well, oil well or salt water disposal well. This tax applies also to interest well contracts on the "taxable compensation" received from the other owners. Drilling, redrilling, directional drilling or working over a gas well, oil well or salt water disposal well performed as sub work for a prime contractor is not subject to tax when the prime contractor has paid the 3½% tax on the total "taxable compensation".

35 Miss. Admin. Code Pt. 4, R. 301 Rule 301

Contracts of $10,000 or less and oil field services involving activities other than those listed in the preceding paragraph are taxed at the regular retail rate of tax on the gross income of the business as provided by Section 27-65-23 of the Sales Tax Law.

35 Miss. Admin. Code Pt. 4, R. 302 (Reserved)

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Bond Requirement

35 Miss. Admin. Code Pt. 4, R. 400 Rule 400

Bond Requirement. A surety bond must be filed on taxable contracts exceeding $75,000 performed in this state unless the tax is prepaid. 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 Section 27-65-21 begun during the period specified therein, regardless of the date of completion. The bond must be sufficient to cover the liability for sales, use, income and withholding taxes and must be approved by the Commissioner.

35 Miss. Admin. Code Pt. 4, R. 401 (Reserved) Sales or Use Tax on Purchases

35 Miss. Admin. Code Pt. 4, R. 500 Rule 500

Sales or Use Tax on Purchases. Drilling contractors and operators are required to pay retail sales or use tax on the purchase of all equipment, materials or supplies. Material Purchase Certificates are not issued to drilling contractors.

35 Miss. Admin. Code Pt. 4, R. 501 Rule 501

Directional drilling is subject to the regular retail rate of tax unless it is performed by the drilling contractor. If the directional drilling is performed by the drilling contractor, it is subject to the contractor's tax as a part of the drilling contract.

35 Miss. Admin. Code Pt. 4, R. 502 Rule 502

A truck (chassis, motor, etc.) used to haul specialized equipment is taxed at the special 3% rate of sales or use tax and the specialized equipment mounted thereon is taxed at the regular retail rate of tax (example: drilling or workover rigs).

35 Miss. Admin. Code Pt. 4, R. 503 Rule 503

When property has not been use in another state and is imported into this State for use, the taxable basis is the value of the property at the time of importation. Credit for sales or use tax paid to another state in which the property was acquired or used may be taken in computing the amount of use tax due this State, but such credit must be computed by applying the rate of sales or use tax paid to another state of the value of the property at the time it enters Mississippi.

35 Miss. Admin. Code Pt. 4, R. 504 Rule 504

Owners or other persons receiving benefit from use of tangible personal property in this State are liable for use tax on such property.

35 Miss. Admin. Code Pt. 4, R. 505 (Reserved)

Rentals

35 Miss. Admin. Code Pt. 4, R. 600 Rule 600

Rentals. Rental or lease of equipment and other tangible personal property is taxed at the same rates as sales of the same property. The lessor is primarily liable for this tax but is required to add tax to his invoice and to collect the amount of tax due from the lessee.

35 Miss. Admin. Code Pt. 4, R. 601 Rule 601

Adequate records must be maintained to substantiate classifications of income and purchases.

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35 Miss. Admin. Code Pt. 4, R. 602 (Reserved)

Chapter 03 Construction Equipment - Dealers

Tax Rates

35 Miss. Admin. Code Pt. 4, R. 100 Rule 100

Tax Rates. Sales of all construction equipment, attachments, parts, labor and services are taxable at the regular retail rate of sales tax.

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

Sales under a warranty agreement with the manufacturer are not taxable on that part charged to the factory. Any part of the charge made to the customer is taxable at the regular retail rate.

35 Miss. Admin. Code Pt. 4, R. 102 Rule 102

Internal sales of parts and labor that are necessary to repair construction equipment in inventory of the dealers are not taxable because the tax will apply on the sale of the repaired equipment.

35 Miss. Admin. Code Pt. 4, R. 103 Rule 103

“Sales price” or “purchase price” means the full amount received from the sale of property, including carrying charges when a dealer carries his own paper, delivery charges, manufacturers excise tax and any other additions to the selling price. No distinction is made between sales of new, used or trade-in equipment for tax purposes, all being taxed on the differences in the sales price and the amount allowed for a trade-in.

35 Miss. Admin. Code Pt. 4, R. 104 (Reserved)

Repossessions

35 Miss. Admin. Code Pt. 4, R. 200 Rule 200

Repossessions. Repossessions shall be treated as returned merchandise and credit will be allowed only for the uncollected part of the selling price previously reported. The subsequent sale of the repossessed item will be taxable on the same basis as the sale of new merchandise.

35 Miss. Admin. Code Pt. 4, R. 201 (Reserved)

Rentals

35 Miss. Admin. Code Pt. 4, R. 300 Rule 300

Rentals. Income from renting or leasing tangible personal property is taxed at the same rates as sales of the same property.

35 Miss. Admin. Code Pt. 4, R. 301 Rule 301

Licensed dealers owe no tax on the cost of property withdrawn from inventory for lease or rental. Subsequent sales of property that has been rented or leased are taxed on the full sales price with no deduction allowed as a result of tax paid on rental or lease income.

35 Miss. Admin. Code Pt. 4, R. 302 (Reserved)

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Out of State Sales

35 Miss. Admin. Code Pt. 4, R. 400 Rule 400

Out-of-state-sales. All sales of equipment by Mississippi dealers are presumed to have been made in this State unless the dealer can provide factual evidence that the equipment was delivered to the customer outside of this State for first use in another state.

35 Miss. Admin. Code Pt. 4, R. 401 (Reserved)

Use Tax

35 Miss. Admin. Code Pt. 4, R. 500 Rule 500

Use Tax. Persons who buy equipment in other states are liable for the payment of a use tax at the same rate and on the same basis as the sales tax, with proper credit allowed for another state’s tax.

35 Miss. Admin. Code Pt. 4, R. 501 Rule 501

Purchases of property for resale are wholesale sales and exempt from sales or use tax

35 Miss. Admin. Code Pt. 4, R. 502 (Reserved)

Chapter 04 Oil Field Services

Levy

35 Miss. Admin. Code Pt. 4, R. 100 Rule 100

Every person engaging in the business of performing services in connection with geophysical surveying, exploring, developing, drilling, producing, distributing or testing of oil, gas, water and other mineral resources is liable for the regular retail rate of tax on gross income received except as otherwise provided. This includes persons acting as operators or performing management services for a fee in connection with developing, producing or distributing mineral resources. Consultants, supervisors and engineers whose presence is required at the well site or inside the oil field on a permanent or continuing basis are considered to be engaged in an oil field service and are liable for sales tax. Where the operator owns an interest in a well under his management, he is liable for tax on compensation received from the other owners.

35 Miss. Admin. Code Pt. 4, R. 101 (Reserved)

Gross Income

35 Miss. Admin. Code Pt. 4, R. 200 Rule 200

Any business which performs taxable services incurs business expenses which of necessity must be recovered through charges for its services. Such expenses include meals and lodging for employees, mileage, equipment rental and supplies such as chemicals, swab cups and explosives which are used or consumed in the performance of services. The term "gross income" includes charges made for recovery of these expenses and are taxable irrespective of the fact that they may be itemized or that the goods or services have borne a retail tax at the time of purchase.

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35 Miss. Admin. Code Pt. 4, R. 201 Rule 201

Charges for transportation, outside an oil or gas field, in connection with rigging up or rigging down are not includable in taxable receipts. Companies which rig up or down a derrick in connection with hauling said derrick are deemed to be in the transportation business and are subject to tax only on the portion of the service performed in the oil or gas field. Transportation from one location in a field to another location in the same field is considered an oil field service taxable at the regular retail rate of sales tax.

35 Miss. Admin. Code Pt. 4, R. 202 Rule 202

Services such as salt water disposal, but not limited thereto, are considered oil field services taxable at the regular retail rate of sales tax on the gross income received from such service. Any transportation charges in connection with such services are considered an expense of performing the service and are not excludable from gross income. 203 "Gross income" from gathering and interpreting data within and without this State may be apportioned between the states if adequate records are maintained. "Gross income" does not include receipts which constitute reimbursement by clients for cost of easements to cross or enter land of property owners for property damage payments. In addition to services ordinarily rendered, the operator of a management company may also act as agent for well owners in arranging for other services. In such cases, the operator is not liable for tax on receipts which represent rebilling to the owners of payments made to vendors by the operator for property purchased and services performed for owners on which the regular retail rate of tax has been paid to the vendors.

35 Miss. Admin. Code Pt. 4, R. 204 Rule 204

The gross income from oil field services performed in Mississippi is taxable at the regular retail rate of sales tax with the following exceptions: 1. Compensation received from a contract in excess of $10,000 to drill, redrill or work over an oil well or a gas well is taxable at the 31/2% contractor's rate of tax. 2. No sales tax is due when service is performed for another licensed dealer in the same service.

35 Miss. Admin. Code Pt. 4, R. 205 Adequate records must be maintained to substantiate exempt sales

35 Miss. Admin. Code Pt. 4, R. 206 (Reserved)

Equipment

35 Miss. Admin. Code Pt. 4, R. 300 Rule 300

Equipment purchases or rentals and purchases of supplies are taxable at the regular retail rate of sales or use tax.

35 Miss. Admin. Code Pt. 4, R. 301 Rule 301

Manufactured or produced products withdrawn for use or consumption are taxable at the regular retail rate of tax, measured by the cost or value when converted to use. In no instance shall value be less than the selling price of similar products.

35 Miss. Admin. Code Pt. 4, R. 302 (Reserved)

Sub Part 11 Transportation

Chapter 01 Railroad Companies

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35 Miss. Admin. Code Pt. 4, R. 100 Rule 100

All railroad companies are required to have direct pay permits for purposes of reporting and paying to the Commissioner the sales and use tax applicable to purchases of tangible personal property and services in lieu of payment of the tax to the vendor. The direct pay permit does not relieve the vendor of the liability for the contractor’s tax levied by Miss. Code Ann. Sections 27-65-21. Railroads will file and pay all tax due on property purchased, used or consumed within the State of Mississippi.

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

The following purchases by railroad companies are classified according to the applicable sales or use tax due: 1. Exempt a. Locomotives and rail rolling stock, including all units that move on rails and materials for their repair. b. Locomotive fuel c. Locomotive water d. Sales of electricity, current, power, steam, coal, natural gas, liquefied petroleum gas or other fuel to operate railroad locomotives. See Title 35 Miss. Admin. Code, Part IV, Subpart 6, Chapter 01 concerning the Affidavit for Utility Exemption. 2. Regular retail rate a. Supplies and materials for right of way maintenance 3. Special 3% rate a. Creosoting and treating of track and bridge materials b. Culverts, drainpipes and ballast for use in the roadway c. Equipment and materials for use in signals and interlockers d. Ties, piling, timber and lumber, when used in track or track structures.

35 Miss. Admin. Code Pt. 4, R. 102 Rule 102

Any other purchases will be taxed at the rates provided by law. Adequate records must be maintained to substantiate tax classifications of sales and purchases.

35 Miss. Admin. Code Pt. 4, R. 103 Rule 103

Rental or lease of tangible personal property to railroad companies is taxed at the same rates as sales of the same property.

35 Miss. Admin. Code Pt. 4, R. 104 (Reserved)

35.IV.11.01 revised effective December 1, 2020

Chapter 02 Automobile, Truck and Truck-Tractor Dealers

35 Miss. Admin. Code Pt. 4, R. 100 Terms and Definitions

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

Automobiles, trucks and truck-tractors shall include only vehicles which are commonly known to the trade as such. The term includes motor homes (self-propelled) but does not include mobile homes, campers, trailers, semi-trailers, motorcycles, warehouse trucks, draglines, golf carts and similar vehicles.

35 Miss. Admin. Code Pt. 4, R. 102 Rule 102

Semi-trailer for tax purposes is one that is attached to and moved by a truck-tractor.

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35 Miss. Admin. Code Pt. 4, R. 103 Rule 103

Sales price or purchase price for tax purposes means the full amount received from the sale of property, including delivery charges, manufacturers excise tax and any other additions to the selling price, unless specifically excluded by statute. The Federal Retailers Excise Tax on truck chassis and bodies and on truck-trailer and semi-trailer chassis and bodies is exempt from sales tax. No distinction is made between sales of new, used or trade-in vehicles for sales and use tax purposes, all being taxed on the difference in the sales price and the amount allowed for a trade-in. A trade-in is limited to property of the same kind and character as that normally carried in inventory for sale.

35 Miss. Admin. Code Pt. 4, R. 104 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 200 Rate and Application of Tax

35 Miss. Admin. Code Pt. 4, R. 201 Rule 201

The special rate of tax on sales and rentals of automobiles and trucks with a gross weight of 10,000 lbs. or less is 5%. Motor homes are also taxed at the special rate of 5% as private carriers of passengers under Miss. Code Ann. Section 27-65-17. Motorcycles are taxed at the regular retail rate of tax. Truck-tractors and semi-trailers are taxed at the special rate of 3%. Effective July 1, 2014, Miss. Code Ann. Section 27-65-101(1)(ss) provides an exemption for truck-tractors and semi-trailers used in interstate commerce and registered under the International Registration Plan (IRP) or any similar reciprocity agreement or compact relating to the proportional registration of commercial vehicles as provided for in Miss. Code Ann. Section 27-19-143. Retail sales or rental of other tangible personal property are taxable at the regular retail rate of tax.

35 Miss. Admin. Code Pt. 4, R. 202 Rule 202

Special equipment already mounted on a truck, the function of which is to transport persons or property, is taxable at the applicable rate of tax as the truck when sold as a complete unit. If sold separately, the regular retail rate of tax will be applicable. (Example: bus bodies, concrete mixing equipment, tanks for transportation of liquids and the like.)

35 Miss. Admin. Code Pt. 4, R. 203 Rule 203

Equipment mounted on a vehicle so that it can be transported from place to place for the performance of a special function while stationary is taxable at the regular retail rate of tax whether sold as a complete unit or separately. (Example: seismographic equipment, oil well work-over rigs, cherry pickers and the like.)

35 Miss. Admin. Code Pt. 4, R. 204 Rule 204

Electric Power Associations (EPAs) purchasing automobiles or trucks with a gross weight of 10,000 lbs. or less, are taxed at the reduced rate of 1% plus the additional 2% tax levied by Miss. Code Ann. Section 27-65-17. Direct pay permits may not be used to self-accrue this tax.

35 Miss. Admin. Code Pt. 4, R. 205 Rule 205

Accessories permanently attached to a vehicle at the time of sale, such as overdrive, heater and radio, are taxable at the same rate as that of the vehicle. Accessories that are not permanently attached are taxable at the regular retail rate of tax.

35 Miss. Admin. Code Pt. 4, R. 206 Rule 206

Sales between licensed new or used car dealers of merchandise (parts & accessories) for resale at retail are exempt from sales tax. Sales of new motor vehicles to used car dealers

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are taxable. Sales of merchandise to licensed leasing and rental companies for subsequent lease or rental are likewise exempt from sales tax.

35 Miss. Admin. Code Pt. 4, R. 207 Rule 207

The sales of accessories, equipment, labor, parts and services are taxable at the regular retail rate of tax when sold to a consumer and exempt when sold to other licensed retail dealers for resale. Income received from the repair (labor and parts) of vehicles for another licensed dealer where the vehicle will be placed in stock for sale is exempt.

35 Miss. Admin. Code Pt. 4, R. 208 Rule 208

Internal sales of parts and labor that are necessary to repair a vehicle in inventory are exempt because the tax will apply on the sale of the repaired vehicle. However, merchandise such as tires for wreckers and similar withdrawals from stock for business use are taxable at the regular retail rate.

35 Miss. Admin. Code Pt. 4, R. 209 Rule 209

Dealers titling a vehicle for wholesaler will be required to report 5% sales tax based on the NADA value of the vehicle, absent any valid sales invoice from the wholesaler.

35 Miss. Admin. Code Pt. 4, R. 210 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 300 Service Contracts

35 Miss. Admin. Code Pt. 4, R. 301 Rule 301

The sale of a contract to provide for maintenance and/or repairs of a motor vehicle is exempt from sales tax when sold either with the vehicle or separate from the sale of the vehicle. These contracts are known in the industry as either a service contract, extended warranty or other similar names and are separate from the original new car warranty as provided by the manufacturer. Income received from the subsequent repair work performed by the dealer under the provisions of these contracts is taxed at the regular retail rate of tax.

35 Miss. Admin. Code Pt. 4, R. 302 Rule 302

The income received and retained by an automobile dealer derived from the sale of maintenance and/or repair agreements to cover work performed at a specific dealership(s), is treated as the prepayment of maintenance and repairs. The income received from such sale is taxed at the regular retail rate of tax as any other automobile repairs.

35 Miss. Admin. Code Pt. 4, R. 303 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 400 Wrecker and Towing Service

35 Miss. Admin. Code Pt. 4, R. 401 Rule 401

Charges for wrecker or towing services where no other taxable services (repairs, storage or other similar service) are provided are exempt from sales tax. When wrecker or towing services are provided in connection with other services that are taxable, the total amount is subject to the regular retail rate of tax. The separate invoicing of the wrecker or towing services would not affect the taxability of the charges. The taxability of wrecker and towing services is determined for each instance that includes this service and not for the business as a whole.

35 Miss. Admin. Code Pt. 4, R. 402 (Reserved)

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35 Miss. Admin. Code Pt. 4, R. 500 Warranty Repairs

35 Miss. Admin. Code Pt. 4, R. 501 Rule 501

Repairs to a vehicle under the original new vehicle manufacturers’ warranty where payment or credit is directly from the manufacturer are exempt. Rental cars provided under the new car warranty, either from the dealer’s own fleet or through a car rental agency, are considered part of the warranty repair and not subject to sales tax or the motor vehicle rental tax. Any part of the charge for repairs or service billed to or paid by the customer is taxable at the regular retail rate of tax.

35 Miss. Admin. Code Pt. 4, R. 502 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 600 Rebates

35 Miss. Admin. Code Pt. 4, R. 601 Rule 601

A rebate given by the dealer is considered to be a discount deductible from the sales price when shown on the sales invoice and is exempt.

35 Miss. Admin. Code Pt. 4, R. 602 Rule 602

Rebates made directly by the manufacturer that are assigned to the dealer are taxable under Miss. Code Ann. Section 27-65-3.

35 Miss. Admin. Code Pt. 4, R. 603 Rule 603

Incentive awards paid to the dealer by the manufacturer which do not affect the selling price to the customer are considered to be a reduction in cost to the dealer and are not taxable.

35 Miss. Admin. Code Pt. 4, R. 604 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 700 Cars furnished by Dealers

35 Miss. Admin. Code Pt. 4, R. 701 Rule 701

A vehicle furnished free of charge or at less than an arms-length charge is taxable to the dealer on the value of the vehicle when withdrawn from stock. This includes cars used by owners, salesmen, dealership employees, or any other individual whom the dealership has given a car for use. The value of the vehicle shall be determined by computing the annual lease value of the vehicle based on its fair market value (FMV) as of the first date the auto is made available for personal use. The FMV is determined to be the manufacturers invoice price. This figure should then be used to determine the annual lease value assigned by the Internal Revenue Service in absence of any other method of determination provided by the Department. Tax at the rate of 5% should be paid on the total lease value of all vehicles provided to individuals for personal use. No credit for tax paid on the use of the vehicle will be allowed against the tax due once the vehicle is sold. The total tax due should be computed on December 31st of each year and reported on the December sales tax return due by January 20th.

35 Miss. Admin. Code Pt. 4, R. 702 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 800 Rentals

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35 Miss. Admin. Code Pt. 4, R. 801 Rule 801

Income from renting or leasing tangible personal property is taxed at the same rates as sales of the same property.

35 Miss. Admin. Code Pt. 4, R. 802 Rule 802

Dealers owe no tax on the cost of property when withdrawn from inventory for lease or rental. Sales of property that has been rented or leased are taxable on the full sales price with no deduction allowed as a result of tax paid on rental or lease income.

35 Miss. Admin. Code Pt. 4, R. 803 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 900 Repossessions

35 Miss. Admin. Code Pt. 4, R. 901 Rule 901

Repossessions shall be treated as returned merchandise and credit will be allowed only for the uncollected part of the selling price previously reported and taxed. The subsequent sale of the repossessed car will be taxable on the same basis as the sale of any other car.

35 Miss. Admin. Code Pt. 4, R. 902 Rule 902

Repossessions by out-of-state dealers do not cancel or void use tax liabilities which accrue to the purchaser simultaneously with the first use or registration of the vehicle in Mississippi.

35 Miss. Admin. Code Pt. 4, R. 903 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 1000 Out-of-State Sales

35 Miss. Admin. Code Pt. 4, R. 1001 Rule 1001

Sales of automobiles, trucks, truck-tractors, semi-trailers, trailers, boats, travel trailers, motorcycles and all-terrain cycles which are exported from this state within forty-eight (48) hours and registered and first used in another state are exempt from sales tax. A properly executed Certificate of Interstate Sale must be maintained to substantiate sales of boats, all-terrain cycles or other equipment not required to be registered for highway use. A golf cart is not an all-terrain cycle and would be taxable at the seven percent (7%) regular rate of tax at the time of purchase regardless of its intended use or modifications made for multi- purpose use.

35 Miss. Admin. Code Pt. 4, R. 1002 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 1100 Isolated, Casual or Occasional Sales

35 Miss. Admin. Code Pt. 4, R. 1101 Rule 1101

The 5% rate of sales or use tax is due on motor vehicles purchased by any person, firm or corporation from another person, firm or corporation which is not a licensed dealer. "Motor vehicle" includes private carriers of passengers, school buses, church buses, taxicabs, ambulances, hearses, motorcycles, private carriers of property, and private commercial carriers of property and drays of a gross weight of ten thousand (10,000) pounds or less. Sales or use taxes on such purchases are to be paid to the County Tax Collector at the time the motor vehicle is registered or licensed. The 5% sales or use tax is based on the true value of the vehicle using the most current official motor vehicle assessment schedule as supplied by the Department as provided by Miss. Code Ann. Section 27-65-201. Purchases

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of other non-business motor vehicles or property are not taxable when purchased as isolated, casual or occasional sales.

35 Miss. Admin. Code Pt. 4, R. 1102 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 1200 Purchases

35 Miss. Admin. Code Pt. 4, R. 1201 Rule 1201

All purchases of tools, supplies, machinery and equipment which are bought for use in operating the business and not for resale, or which do not become an integral part of vehicles being repaired are taxable at the regular retail rate of sales or use tax.

35 Miss. Admin. Code Pt. 4, R. 1202 Rule 1202

Purchases of vehicles, parts and other merchandise for resale are exempt from sales or use tax.

35 Miss. Admin. Code Pt. 4, R. 1203 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 1300 Records

35 Miss. Admin. Code Pt. 4, R. 1301 Rule 1301

Adequate records must be maintained to substantiate tax classifications on sales and purchases.

35 Miss. Admin. Code Pt. 4, R. 1302 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 1400 Use Tax

35 Miss. Admin. Code Pt. 4, R. 1401 Rule 1401

Persons who purchase vehicles, which will be registered and used in this state, from dealers located in other states are liable for the payment of use tax at the same rate and on the same basis as sales tax. The Mississippi use tax is payable to the County Tax Collector if not previously paid to an authorized out-of-state dealer, registered with the Mississippi Department of Revenue, at the time of purchase. Credit for the amount of sales tax paid to the dealer in the other state, that retains the tax collected on the sale, is not allowed against the Mississippi use tax due on automobiles, motor homes, trucks, truck-tractors and semi- trailers, trailers, boats, travel trailers, motorcycles and all-terrain cycles. Any tax credit allowed must be evidenced by proof of payment.

35 Miss. Admin. Code Pt. 4, R. 1402 Rule 1402

Persons who purchase motor vehicles, which are classified as isolated, casual or occasional sales, are liable for the payment of use tax at the same rate and on the same basis as sales tax (see Isolated, Casual or Occasional Sales in this Rule).

35 Miss. Admin. Code Pt. 4, R. 1403 (Reserved)

35.IV.11.02 revised effective December 1, 2018

Chapter 03 Aircraft

35 Miss. Admin. Code Pt. 4, R. 100 General

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35 Miss. Admin. Code Pt. 4, R. 101 Retail sales of aircraft are taxable at the special rate of 3%

35 Miss. Admin. Code Pt. 4, R. 102 Rule 102

Retail sales of repair parts are taxable at the 7% retail rate of tax. All charges for repairs and servicing to aircraft are exempt from sales tax.

35 Miss. Admin. Code Pt. 4, R. 103 Rule 103

Any facility operating as a repair/service center and aircraft parts dealer will be required to collect and remit Mississippi sales tax at the rate of 7% on all sales from parts and remit sales tax at the rate of 7% on the cost of parts withdrawn from inventory for use in the performance of a repair or service. Tax will not be due on the repair or service charge, including the provided parts, billed to the consumer.

35 Miss. Admin. Code Pt. 4, R. 104 Rule 104

Accessories permanently attached to an aircraft at the time of sale, such as radios, lights, instruments, etc., are taxable at the same rate as that of the aircraft. Accessories sold at a later date are taxed at the 7% retail rate.

35 Miss. Admin. Code Pt. 4, R. 105 Rule 105

Sales price means the full amount received from the sale of property, including delivery charges, manufacturers excise tax and any other additions to the selling price. No distinction is made between sales of new, used or trade-in property for tax purposes, all being taxed on the difference in the sales price and the amount allowed for a trade-in. 106 Sales of aircraft made or facilitated by a person regularly engaged in the sale or facilitation of aircraft, such as a broker, are subject to tax at the rate of 3%. The purchaser is liable for the tax if the facilitator fails to collect the Mississippi tax. The tax due by the purchaser should be remitted directly to the Department.

35 Miss. Admin. Code Pt. 4, R. 107 Rule 107

A trade-in is limited to property of the same kind and character as that normally carried in inventory for sale in the regular line of business.

35 Miss. Admin. Code Pt. 4, R. 108 Rule 108

Sales under a warranty agreement with the manufacturer are not taxable on that part charged to the factory. Any part of the charge made to the customer is taxable at the regular retail rate.

35 Miss. Admin. Code Pt. 4, R. 109 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 200 Exemptions

35 Miss. Admin. Code Pt. 4, R. 201 Rule 201

The gross income from the stripping and painting of commercial aircraft engaged in foreign or interstate transportation business is exempt from sales tax. 202 Sales of parts used in the repair and servicing of aircraft not registered in Mississippi engaged exclusively in the business of foreign or interstate transportation to businesses engaged in aircraft repair and maintenance are exempt from sales tax.

35 Miss. Admin. Code Pt. 4, R. 203 Rule 203

The gross proceeds from the sale of rotary-wing aircraft if exported from this state within forty-eight (48) hours and registered and first used in another state are exempt from sales

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tax.

35 Miss. Admin. Code Pt. 4, R. 204 Rule 204

The gross proceeds of sales of aircraft when used predominately to transport passengers or property to or from offshore oil or natural gas exploration or production platforms or vessels, and engines, accessories and spare parts for such aircraft are exempt from sales tax

35 Miss. Admin. Code Pt. 4, R. 205 Rule 205

Sales, leases, or other retail transfers of fixed-wing aircraft to, or to be used by, certified common carriers that transport people or property within and outside of the State, as well as engines, accessories and spare parts for such aircraft are exempt from sales tax.

35 Miss. Admin. Code Pt. 4, R. 206 Rule 206

Sales of aircraft, accessories, repair parts and labor to licensed retailers for resale or rental in the regular course of business are exempt from sales and use tax.

35 Miss. Admin. Code Pt. 4, R. 207 Income from inside or outside storage charges is exempt from sales tax

35 Miss. Admin. Code Pt. 4, R. 208 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 300 Demonstrations and Rentals

35 Miss. Admin. Code Pt. 4, R. 301 Rule 301

Aircraft used as demonstrators where the aircraft remains in the dealer’s inventory is not subject to sales tax. Supplies or other tangible personal property withdrawn and used by the dealer for demonstration of aircraft, or any other purpose are taxable at the regular retail rate of tax. 302 Income from renting or leasing tangible personal property is taxed at the same rates as sales of the same property. An aircraft is not rented when an instructor accompanies a student for purposes of instruction.

35 Miss. Admin. Code Pt. 4, R. 303 Rule 303

Rebilling or pass through fuel charges are not considered to be taxable rental income when separately invoiced from the charge for rental or lease. Sales of fuel by lessors are not subject to sales tax. Income from inside or outside storage charges is exempt from sales tax. 304 Dealers owe no tax on cost of property when withdrawn from inventory for lease or rental. Sales of property that has been rented or leased are taxable on the full sales price with no deduction allowed as a result of tax paid on rental or lease income.

35 Miss. Admin. Code Pt. 4, R. 305 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 400 Repossessions

35 Miss. Admin. Code Pt. 4, R. 401 Rule 401

Repossessions shall be treated as returned merchandise and credit will be allowed only for the uncollected part of the selling price previously reported and taxed. The subsequent sale of the repossessed equipment will be taxable on the same basis as the sale of any other property.

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35 Miss. Admin. Code Pt. 4, R. 402 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 500 Out-of-state Sales

35 Miss. Admin. Code Pt. 4, R. 501 Rule 501

All sales of aircraft by Mississippi dealers are presumed to have been made in this State unless the dealer can provide factual evidence that the aircraft was delivered to the customer outside of this State for first use in another state.

35 Miss. Admin. Code Pt. 4, R. 502 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 600 Rule 600

Purchases 601 All purchases of tools, supplies, machinery and equipment that are bought for use in operating an aircraft business and not for resale are taxable at the regular retail rate of sales or use tax.

35 Miss. Admin. Code Pt. 4, R. 602 Rule 602

Persons who buy aircraft or parts to repair aircraft from dealers in other states for use in Mississippi are liable for the payment of a use tax at the same rate and on the same basis as sales tax. Credit for the amount of sales tax paid to the dealer in the other state is allowed against the Mississippi use tax due on such purchases. Any tax credit allowed must be evidenced by proof of payment.

35 Miss. Admin. Code Pt. 4, R. 603 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 700 Records

35 Miss. Admin. Code Pt. 4, R. 701 Rule 701

Adequate records must be maintained to substantiate tax classifications of sales and purchases. 702 (Reserved)

35.IV.11.03 revised effective October 17, 2024

Chapter 04 Boats, Barges, Vessels and Marine Commerce

35 Miss. Admin. Code Pt. 4, R. 100 Rule 100

Sales of vessels or barges of fifty (50) tons load displacement and over by the manufacturer or builder are exempt. The gross proceeds of sales of dry docks and offshore drilling equipment for use in oil exploitation or production are exempt. The Federal Luxury Tax, effective January 1, 1991, is in the form of a Federal Retailers Excise Tax, and is therefore excluded from taxable gross proceeds of sales when computing the Mississippi sales or use tax due on sales of boats with a sales price over $100,000.00. Sales of equipment subsequent to original sale and not otherwise exempt are taxable at the regular retail rate.

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

Sales to commercial fishermen of commercial fishing boats of over five (5) tons load displacement and not more than (50) tons load displacement as registered with the United

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States Coast Guard and licensed by the Mississippi Marine Conservation Commission are exempt. Fishing gear with which the boat is permanently equipped is considered part of the boat.

35 Miss. Admin. Code Pt. 4, R. 102 Rule 102

Charter boats which have been licensed and authorized as such by the United States Coast Guard pursuant to 46 CFR 24-26 and 46 CFR 175-187 or 2. Seafood boats licensed by the Mississippi Marine Conservation Commission for use within and without the territorial waters of Mississippi and: a. subject to the regulations, jurisdiction and authority of the Mississippi Marine Conservation Commission, b. subject to a license or fee imposed by the Mississippi Marine Conservation Commission, c. used in waters of other states and required by such other states to pay a license or fee shall, upon issuance of such license, be deemed to be in the business of interstate transportation (Section 49-15-15(o)).

35 Miss. Admin. Code Pt. 4, R. 103 Rule 103

Sales of ice to commercial fishermen purchased for use in the preservation of seafood are exempt from tax.

35 Miss. Admin. Code Pt. 4, R. 104 Rule 104

Sales of motor fuel are exempt from sales tax. Motor fuel means gasoline, butane, diesel or any other fuel used to propel or power motor vehicles, vessels, barges or stationary engines.

35 Miss. Admin. Code Pt. 4, R. 105 Rule 105

The gross income from repairs to vessels and barges engaged in foreign trade or interstate transportation are exempt. "Gross income from repairs" means income from the sale of repair or replacement parts as well as income from repair services. Additional equipment and the installation thereof are taxable at the regular retail rate. Repairs to other vessels are taxable.

35 Miss. Admin. Code Pt. 4, R. 106 Rule 106

Machinery or tools or repair parts therefore or replacements thereof, fuel or supplies used directly in manufacturing, converting or repairing ships of three thousand (3,000) tons load displacement and over are exempt from sales or use tax. Office and plant supplies or other equipment not directly used on the ship being built, converted or repaired are subject to the regular retail rate of tax.

35 Miss. Admin. Code Pt. 4, R. 107 Rule 107

Sales of petroleum products to vessels or barges for consumption in marine international commerce or interstate transportation businesses are exempt. Geophysical vessels used in the collection of data and/or information while operating in international waters are considered to be in international commerce. Sales of petroleum products, other than motor fuel, to vessels and barges performing seismographic work and operations other than that of a transportation business, such as dredges, oil rig supply boats and pleasure boats, are taxed at the regular retail rate of tax.

35 Miss. Admin. Code Pt. 4, R. 108 Rule 108

Sales of tangible personal property to persons operating ships in international commerce for use or consumption on board such ships are exempt from sales tax. This exemption shall be limited to cases in which procedures satisfactory to the Commissioner, insuring

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against use in this State other than on such ships, are established. This exemption does not apply to the purchase of property to be resold within this state.

35 Miss. Admin. Code Pt. 4, R. 109 Rule 109

Sales of lumber, dunnage, strapping, packing containers and other shipping material sold to ship owners, stevedoring companies or any other person for use in ships engaged in international commerce are exempt from sales tax.

35 Miss. Admin. Code Pt. 4, R. 110 Rule 110

Sales of property delivered by the seller to the dock side for immediate export to a foreign country are exempt. Copies of purchase orders from or for overseas customers, marine bills of lading or other documentation must be retained by the seller with the sales invoice in support of this exemption.

35 Miss. Admin. Code Pt. 4, R. 111 Rule 111

Income received from storage and handling of perishable goods by a public storage warehouse is exempt from tax. "Perishable goods" means frozen goods or goods that require refrigeration while stored in a public storage warehouse (example: meat, fish, poultry, vegetables, fruits, etc.). Perishable goods shall also include grain products which require aeration while stored in a public warehouse (example: soybeans, wheat, rice, oats, milo, etc.)

35 Miss. Admin. Code Pt. 4, R. 112 Rule 112

When the export exemption is claimed for merchandise purchased for a ship's crew, the chandler must have a purchase order from the ship's captain for each item of property and delivered the property to the ship in the same manner as the other supplies. All sales of personal property to ship's personnel who buy and accept its delivery in person from the seller are taxable at the regular retail rate of tax.

35 Miss. Admin. Code Pt. 4, R. 113 Rule 113

Stevedoring charges for loading or unloading vessels engaged in foreign or interstate commerce are exempt.

35 Miss. Admin. Code Pt. 4, R. 114 Rule 114

Sales of machinery, machine parts and/or equipment to an operator or lessee of any structures, facilities and lands acquired and operated or leased pursuant to any of the provisions of Chapter 9, Title 59, Mississippi Code of 1972, which machinery, machine parts and/or equipment is to be located on and used exclusively and directly in the operation of such structures, facilities and lands are taxable at the 11/2% rate of tax.

35 Miss. Admin. Code Pt. 4, R. 115 Rule 115

Sales of equipment and supplies (hardware, canvas, lines, sheets, paint, clothing, linens, lumber, cleaning materials, etc.) to any boat are taxable at the regular retail rate of tax, unless otherwise exempt.

35 Miss. Admin. Code Pt. 4, R. 116 (Reserved)

Sub Part 12 Medical

Chapter 01 Optometrists and Ophthalmologists

Professional Services

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35 Miss. Admin. Code Pt. 4, R. 100 Rule 100

Optometrists and ophthalmologists primarily rendering professional services are not construed as retailers by the Sales Tax Law, but are regarded as the users or consumers of all tangible personal property purchased either to be consumed or used by them or delivered to their customers in connection with the professional services rendered. Optometrists and ophthalmologists who manufacture glasses pursuant to their own examinations and prescriptions are also considered the users of all ophthalmic goods and related products purchased and are treated the same as non-manufacturing optometrists or ophthalmologists. Sales to or purchase by optometrists or ophthalmologists, in this instance, are taxable at the regular retail rate of sales or use tax which should be charged and collected by the seller at the time of sale. If the use tax is not charged and collected by the out-of-state seller at the time of sale, the purchaser is required to file a use tax return, Form 72-110, covering the tax applicable to such out-of-state purchases.

35 Miss. Admin. Code Pt. 4, R. 101 (Reserved)

Retail Sales

35 Miss. Admin. Code Pt. 4, R. 200 Rule 200

Optometrists who maintain and operate a retail establishment such as a jewelry store, optical supply house, etc., or who are associated with a retail establishment, are construed as retailers and are liable for a sales tax on their Mississippi sales. Purchases of merchandise by a licensed retailer for resale at retail are exempt from sales or use tax.

35 Miss. Admin. Code Pt. 4, R. 201 Rule 201

Opticians, optical dispensaries, and optical supply houses, or any other person selling tangible personal property and not primarily rendering professional services as optometrists and ophthalmologists, as outlined in the first paragraph above, are likewise construed as retailers or wholesalers and are required to file Mississippi sales or use tax returns. A licensed retail establishment employing an examiner may exclude the examination charge from the gross proceeds of sales; provided this fee is a separate charge and records are kept to substantiate it.

35 Miss. Admin. Code Pt. 4, R. 202 (Reserved)

Chapter 02 Hospitals, Infirmaries and Sanatoriums

35 Miss. Admin. Code Pt. 4, R. 100 Rule 100

Gross income received from the operation of a nursing home, hospital or similar institution is exempt from sales tax. Gross income from rental of tangible personal property or the operation of a drug store, cafeteria, gift shop or other business open to the public is subject to sales tax in the same manner as a similar independent business. Sales of non-prescription drugs and medicines or other property to out-patient or employees are likewise taxable at the regular retail sales tax rate. Sales of prescription drugs (legend drugs) and insulin are exempt from sales tax.

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

Home health care agencies, hospices or similar institutions, which operate as a separate legal entity (whether profit or non-profit) and not as a division or department of the exempt entity, are not exempt, and cannot be covered under the exemption provided to an affiliated exempt corporation. These agencies are subject to tax on purchases that are used or

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consumed by the institutions in the regular course of their business. Items, for the patient use, that are rebilled to the patient by the institution, are also subject to sales tax. This sales tax should be computed on the price billed to patients and/or their insurance provider.

35 Miss. Admin. Code Pt. 4, R. 102 Rule 102

Any department or division of an exempt entity, whether located on site or off-site, which performs services that are ordinary and necessary to the operation of the exempt entity, including but not limited to home health care, hospice, outpatient cancer, dialysis, cardiology, catheterization lab, diagnostic, lithotripsy, magnetic resonance imaging, rehabilitation, surgery, teleradiology, are exempt from sales tax.

35 Miss. Admin. Code Pt. 4, R. 103 Rule 103

Any department or division of an exempt entity, whether located on site or off-site, which is not ordinary and necessary to the operation of the exempt entity, is not covered under the exemption granted and is subject to the tax on its purchases. This includes, but is not limited to, wellness centers, physician’s offices, and clinics.

35 Miss. Admin. Code Pt. 4, R. 104 Rule 104

Hospital, under Section 41-9-3, is defined not to include convalescent or boarding homes, children’s homes, homes for the aged or other like establishments where room and board only are provided, nor does it include offices or clinics where patients are not regularly kept as bed patients.

35 Miss. Admin. Code Pt. 4, R. 105 Rule 105

Infirmaries are defined as a facility where overnight care can be provided.

35 Miss. Admin. Code Pt. 4, R. 106 Rule 106

Meals furnished or sold to employees of an institution are exempt where the eating facility is not open to the public or guest of the institution. Where eating facilities of an institution are open to the public, sales tax is due on the gross income, including sales of meals to employees and meals served to guests in patient’s rooms.

35 Miss. Admin. Code Pt. 4, R. 107 Rule 107

Institutions are consumers of products furnished to patients or used in services rendered. The amount subject to tax shall be the full price paid by the institution on all items, including meals, furnished by all for-profit hospitals, nursing homes, infirmaries or other similar institutions. This amount includes any overhead charge, preparation charge or any other charge paid for the item, even if it is separately stated or separately billed.

35 Miss. Admin. Code Pt. 4, R. 108 Rule 108

Gross receipts from the sale or rental of tangible personal property, and services rendered to institutions owned and operated by the Federal Government, or the State of Mississippi, its counties, cities and corporations or associations, whose earnings do not inure to the benefit of any individual, group or shareholder, are exempt from sales tax. This exemption as applied to non-profit institutions is limited to purchases for use in the ordinary and necessary operation of the institution. This exemption does not apply to contractors performing services subject to the contractor's tax.

35 Miss. Admin. Code Pt. 4, R. 109 Rule 109

Sales and rentals to exempt institutions must be substantiated by sales invoices and other records. Sales and rentals to all other institutions are subject to the regular retail sales or use tax. From and after July 1, 1999, the portion of sales and rentals paid by Medicare and Medicaid are exempt from sales or use tax. From and after July 1, 2009, the entire sale or

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rental, when payment for such is made in part or in whole by Medicare or Medicaid, is exempt from sales or use tax.

35 Miss. Admin. Code Pt. 4, R. 110 (Reserved)

35.IV.12.02 revised effective July 1, 2009

Chapter 03 Dental Laboratories and Dental Supply Houses

Dentists

35 Miss. Admin. Code Pt. 4, R. 100 Rule 100

Dentists. The gross income received by dentists in the performance of their professional services is not subject to the provisions of the Sales Tax Law. Dentists are considered as the users and consumers of all materials, supplies and equipment purchased by them for use in their dental practice. Therefore, all sales made to dentists are retail transactions taxable at the regular retail rate of sales or use tax.

35 Miss. Admin. Code Pt. 4, R. 101 (Reserved)

Dental Laboratories

35 Miss. Admin. Code Pt. 4, R. 200 Rule 200

Dental Laboratories. The gross income of dental laboratories derived from repair work performed for dentists or other customers, as well as from the sales of tangible personal property is taxable at the regular retail rate.

35 Miss. Admin. Code Pt. 4, R. 201 (Reserved)

Dental Supply Houses

35 Miss. Admin. Code Pt. 4, R. 300 Rule 300

Dental Supply Houses. Sales of raw materials to licensed dental laboratories that become an integral part of a manufactured product are exempt. Sales of manufacturing machinery or machine parts to licensed dental laboratories for use exclusively and directly in the manufacturing process are taxed at the 1 ½% special rate of tax. The regular retail rate of sales or use tax applies on equipment, tools or supplies sold to dental laboratories and others for use.

35 Miss. Admin. Code Pt. 4, R. 301 Rule 301

Purchases for resale by licensed dental supply houses are exempt from sales or use tax.

35 Miss. Admin. Code Pt. 4, R. 302 (Reserved)

Equipment Rentals

35 Miss. Admin. Code Pt. 4, R. 400 Rule 400

Equipment Rentals. Rental or lease of tangible personal property is taxed at the same rates as sales of the same property.

35 Miss. Admin. Code Pt. 4, R. 401 (Reserved)

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Records

35 Miss. Admin. Code Pt. 4, R. 500 Rule 500

Records. Adequate records must be maintained to substantiate tax classifications of sales and purchases.

35 Miss. Admin. Code Pt. 4, R. 501 (Reserved)

Sub Part 13 General

Chapter 01 Affiliated Corporations

35 Miss. Admin. Code Pt. 4, R. 100 Rule 100

Each separately organized corporation is a “person” within the meaning of the law, not withstanding its affiliation with or relation to any other corporation through stock ownership by a parent corporation or by the same group of individuals.

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

Each corporation shall file a separate return and include therein the tax liability accruing to such corporation. This applies to each corporation in an affiliated group, as the law makes no provision for filing of consolidated returns by affiliated corporations.

35 Miss. Admin. Code Pt. 4, R. 102 Rule 102

Transactions where title to taxable property is transferred from one corporation to an affiliated corporation, partnership, or stockowner constitute taxable events, and these inter- company transactions may not be eliminated from the measure of tax imposed.

35 Miss. Admin. Code Pt. 4, R. 103 (Reserved)

Chapter 02 Sales Made By and To Schools, Colleges and Universities

Junior Colleges, Community Colleges, Colleges and Universities

35 Miss. Admin. Code Pt. 4, R. 100 General

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

Miss. Code Ann. Section 27-65-105(a) and (b) exempt sales of property and services when sold to, billed to, and paid for directly by Mississippi’s public colleges and universities. Sales to nonprofit private colleges and universities are exempt pursuant to Miss. Code Ann. Section 27-65-111(g). The exemptions under 27-65-105(b) and 27-65-111(g) do not apply to items that are not used in the ordinary operation of the school and do not apply to items resold to students.

35 Miss. Admin. Code Pt. 4, R. 102 Rule 102

Junior colleges, community colleges, colleges and universities undertake many activities that require the school to collect and remit sales tax. Miss. Code Ann. Section 27-65-9 provides that exempt organizations or political entities are in “business” for sales tax purposes when any of the activities carried on by those organizations are in competition with privately owned businesses that are subject to sales tax.

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35 Miss. Admin. Code Pt. 4, R. 103 Rule 103

For the purposes of this rule, students are defined as persons receiving a course of instruction at the school and will include those taking short specialized courses and those attending camps.

35 Miss. Admin. Code Pt. 4, R. 104 Rule 104

In those instances where the school has contracted with a third party vendor to operate facilities on campus, such as a bookstore or cafeteria, the vendor will be responsible for collecting and remitting the tax. The school will remain liable for the tax when the vendor is merely acting as an agent for and on behalf of the school.

35 Miss. Admin. Code Pt. 4, R. 105 Rule 105

Miss. Code Ann. Section 27-65-75(1)(b) provides that eighteen and one-half percent (18½%) of the tax collected from business activities on the campus of any state institution of higher learning or community or junior college shall be paid to the school when the business location is not located within the corporate limits of a municipality. Such payments are made on or before the 15th of the month following the collection of the tax by the Department of Revenue.

35 Miss. Admin. Code Pt. 4, R. 106 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 200 Book Stores

35 Miss. Admin. Code Pt. 4, R. 201 Rule 201

Sales of school textbooks to students are exempt from tax pursuant to Miss. Code Ann. Section 27-65-105(c). A textbook is defined as a book with instructional content on a particular subject matter required by the instructor of a class to be used by a student. Textbooks must have an ISBN (International Standard Book Number), and does not include page copies. The exemption also applies to a charge to access digital eBook textbooks required by an instructor. A novel is not considered to be a textbook. All other sales are taxable, including, but not limited to, items such as paper, notebooks, ink, pencils, laboratory supplies, clothing, food or drink.

35 Miss. Admin. Code Pt. 4, R. 202 Rule 202

Interdepartmental sales, sales delivered out-of-state and sales to tax-exempt entities are not taxable.

35 Miss. Admin. Code Pt. 4, R. 203 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 300 Cafeterias, Dining Halls and Other On Campus Food Sales

35 Miss. Admin. Code Pt. 4, R. 301 Rule 301

Sales tax is due on all sales to students with the exception of regular on-campus meals provided as a part of a prepaid student meal plan pursuant to Miss. Code Ann. Section 27- 65-9(2)(a) and (c). Prepaid student meal plans are those plans that provide the student with a specific number of meals or meals for a specific period of time, and also include all meals paid for through the use of a prepaid declining balance account or similar instrument or account issued by the school that may only be used to purchase on-campus prepared meals. Eligible declining balance accounts may commonly be referred to as flexible spending accounts, flex dollars, bonus bucks or dining dollars and are all accounts in which money is deposited for the use of the student and the balance in the account declines based upon the price of the food or drink purchased. Any declining balance account that may be used

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to purchase books, apparel, supplies or other services such as copying or laundering services may not be used to purchase prepared meals exempt from sales tax.

35 Miss. Admin. Code Pt. 4, R. 302 Rule 302

Sales tax is due on all sales of meals to nonstudents such as faculty, employees, visitors and the public. Sales tax is also due on purchases of all prepared meals paid for with cash, checks, bank debit cards or credit cards, regardless of who is purchasing the meal.

35 Miss. Admin. Code Pt. 4, R. 303 Rule 303

Banquets and catering for student groups are exempt when the meal is paid for directly by the exempt entity. Banquets and catering for nonstudent groups are taxable unless billed to another department of the school. Sales rebilled by the school to a private individual or organization are taxable.

35 Miss. Admin. Code Pt. 4, R. 304 Rule 304

Meals provided as a part of camp activities, such as summer athletic camps, are exempt from tax when payment for such meals is a part of the charge made by the school for the camp. This includes camps for students of the college and camps for students visiting from other colleges, universities or grade schools.

35 Miss. Admin. Code Pt. 4, R. 305 Rule 305

Meals provided to employees of an exempt school at no cost are not taxable to the school pursuant to Miss. Code Ann. Sections 27-65-105(a) or 27-65-111(g).

35 Miss. Admin. Code Pt. 4, R. 306 Rule 306

All sales of food made through vending machines owned by the school are taxable at the regular retail rate of tax. Vendors are liable for tax on sales made through “full service” vending machine sales (see Title 35 Mississippi Administrative Code, Part IV, Subpart 04, Chapter 03).

35 Miss. Admin. Code Pt. 4, R. 307 Rule 307

Sales of food through concession stands at athletic events or entertainment events are taxable.

35 Miss. Admin. Code Pt. 4, R. 308 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 400 Athletics, Admissions Charges and Special Events

35 Miss. Admin. Code Pt. 4, R. 401 Rule 401

Miss. Code Ann. Section 27-65-22 levies a tax on the gross income received from charges for admission to any and all forms of entertainment, amusement, diversion, sport, recreation, pastime, shows, exhibitions, contests, displays and games. The tax is levied at the regular retail rate of tax; however, there is a special reduced rate that applies to admission charges to publicly owned, enclosed coliseums and auditoriums, and there are special exemptions that may apply. This special rate does not apply to admission charges to athletic contests between colleges and universities.

35 Miss. Admin. Code Pt. 4, R. 402 Rule 402

Sales of tickets for all athletic games held at a location in Mississippi are taxable at the regular retail rate of tax, except any games for university or community college conference, state, regional or national playoffs or championships as provided for in Miss. Code Ann. Section 27-65-22(3)(h). Tickets sold by visiting teams for games in Mississippi are also taxable even if the proceeds of those ticket sales are deducted from the guaranty owed to the opposing team.

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35 Miss. Admin. Code Pt. 4, R. 403 Rule 403

Sales of programs, t-shirts, hats, stadium cushions, etc., are taxable at the regular retail rate of tax. Rentals are also taxable under Miss. Code Ann. Section 27-65-23.

35 Miss. Admin. Code Pt. 4, R. 404 Rule 404

Tickets to athletic events are not taxable when given away free of charge. Tickets given in payment for services rendered, such as advertising, are taxable upon the customary charge or face value for such admission.

35 Miss. Admin. Code Pt. 4, R. 405 Rule 405

Miss. Code Ann. Section 27-65-22(3)(i) exempts admission charges or participation fees to any county or municipally owned and operated swimming pool, golf course or tennis court. This exemption applies to such facilities owned and operated by state-supported colleges and universities.

35 Miss. Admin. Code Pt. 4, R. 406 Rule 406

Sales and rentals of tangible personal property, such as golf carts, concessions and sporting equipment, are taxable at the regular retail rate of tax. Rentals of lockers are taxable at the regular retail rate of tax when such fees are retained by the schools. Fees for usage of lockers are not taxable when such fees are used as a damage deposit and are returned to the student at the end of the term.

35 Miss. Admin. Code Pt. 4, R. 407 Rule 407

Entry or participation fees for tournaments, such as golf tournaments or tennis tournaments, are taxable except for that portion of the charge which represents the normal admission charge exempted by Miss. Code Ann. Section 27-65-22(3)(i).

35 Miss. Admin. Code Pt. 4, R. 408 Rule 408

Admission charges for temporary amusements or special events are taxable. The promoter of the amusement or event is responsible for collecting and remitting the tax; however, the school may be held liable for any tax due from amusements held at the school should the promoter fail to remit the proper tax (Miss. Code Ann. Section 27-65-22(2)).

35 Miss. Admin. Code Pt. 4, R. 409 Rule 409

The gross income received from all charges made for parking at athletic and special events is subject to tax at the regular retail rate of tax pursuant to Miss. Code Ann. Section 27-65- 23.

35 Miss. Admin. Code Pt. 4, R. 410 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 500 Printing and Photocopying Services

35 Miss. Admin. Code Pt. 4, R. 501 Rule 501

All sales of printed materials and photocopies are taxable at the regular retail rate of tax with the exception of interdepartmental sales, sales made to tax-exempt organizations and sales for resale to a licensed retailer.

35 Miss. Admin. Code Pt. 4, R. 502 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 600 Departmental Sales and Services

35 Miss. Admin. Code Pt. 4, R. 601 Rule 601

All sales of tangible personal property and taxable services sold by departments are subject to tax at the regular retail rate of tax. Such services include, but are not limited to,

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automobile repair, plumbing, heating and air, electrical work and custom meat processing. For a complete list of taxable services, see Miss. Code Ann. Section 27-65-23.

35 Miss. Admin. Code Pt. 4, R. 602 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 700 Miscellaneous Sales and Rentals

35 Miss. Admin. Code Pt. 4, R. 701 Rule 701

Income received from room rentals and property sales by alumni and/or visitor houses is taxable at the regular retail rate of tax pursuant to Miss. Code Ann. Section 27-65-23.

35 Miss. Admin. Code Pt. 4, R. 702 Rule 702

Rentals of refrigerators and other dorm appliances and all other rentals of equipment are subject to tax at the regular retail rate of tax pursuant to Miss. Code Ann. Section 27-65- 23.

35 Miss. Admin. Code Pt. 4, R. 703 Rule 703

All sales of laundry services or dry cleaning services to students or nonstudents are taxable at the regular retail rate of tax pursuant to Miss. Code Ann. Section 27-65-23.

35 Miss. Admin. Code Pt. 4, R. 704 Rule 704

Sales of annuals, awards, articles of clothing or jewelry given in recognition of accomplishments and rentals of caps and gowns are exempt from tax when sold directly to, billed directly to and paid for directly by the exempt entity. Sales of such merchandise are taxable when the vendor sells to and receives payment directly from the individual student.

35 Miss. Admin. Code Pt. 4, R. 705 Rule 705

Sales of invitations, class rings, pins and pictures for the benefit of individual students or student organizations are taxable at the regular retail rate of tax when sold to the student even if billed to an exempt school.

35 Miss. Admin. Code Pt. 4, R. 706 Rule 706

Sales to public and nonprofit private schools for resale, rather than use by the school, are taxable at the regular retail rate of tax unless the school is registered for sales tax purposes. This includes fundraising materials.

35 Miss. Admin. Code Pt. 4, R. 707 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 800 Utilities

35 Miss. Admin. Code Pt. 4, R. 801 Rule 801

Sales of telephone, cable or subscription television services for the private use of students, faculty members or any other persons enrolled or domiciled at an “exempt” school, college or university are taxable at the regular retail rate of tax. The school will be considered the seller of these services when separate charges are made and will be responsible for remitting the tax on all private use of such services pursuant to Miss. Code Ann. Section 27-65-19. No tax will be due on these services when the charge for such services is included in the cost for registration, tuition or dormitory. Charges for such services used in common areas such as student union buildings, media centers, libraries, etc., are exempt when sold directly to, billed directly to and paid for directly by the school.

35 Miss. Admin. Code Pt. 4, R. 802 Charges for internet access are not subject to sales tax

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35 Miss. Admin. Code Pt. 4, R. 803 (Reserved)

Elementary and Secondary Grade Schools

35 Miss. Admin. Code Pt. 4, R. 900 General

35 Miss. Admin. Code Pt. 4, R. 901 Rule 901

Miss. Code Ann. Section 27-65-105(a) and (b) exempt sales of property and services when sold to, billed to, and paid for directly by Mississippi’s public schools and school districts. Sales to nonprofit schools are exempt pursuant to Miss. Code Ann. Section 27-65-111(g). The exemptions under 27-65-105(b) and 27-65-111(g) do not apply to items that are not used in the ordinary operation of the school and do not apply to items resold to students or the public, unless considered to be fundraising materials.

35 Miss. Admin. Code Pt. 4, R. 902 Rule 902

Sales of student meals are exempt from sales tax pursuant to Miss. Code Ann. Section 27- 65-9(2)(b). This exemption also applies to third party vendors who operate a cafeteria at an exempt school or who provide regular student meals at an exempt school. The exemption does not apply to those vendors who may sell additional food items at a school where the student may choose to purchase such food in lieu of the regular meals provided by the school. The tax on such sales is due regardless of whether the vendor collects the money directly from the students or is paid by the school from money the school has collected from the students.

35 Miss. Admin. Code Pt. 4, R. 903 Rule 903

Parent Teacher Associations (PTAs), Parent Teacher Organizations (PTOs), athletic and band boosters and other similar support organizations are not exempt from sales tax even on purchases that will be given to the school. However, purchases for resale that are for the sole purpose of raising funds for the school or an affiliated organization are exempt. The Affidavit for Purchase of Fundraising Materials should be provided to their supplier in association with that purchase.

35 Miss. Admin. Code Pt. 4, R. 904 Rule 904

Admission charges for athletic games and contests between elementary and secondary schools are exempt from sales tax pursuant to Miss. Code Ann. Section 27-65-22(3)(c).

35 Miss. Admin. Code Pt. 4, R. 905 Rule 905

35 Miss. Admin. Code Pt. 4, R. 906 Rule 906

35 Miss. Admin. Code Pt. 4, R. 907 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 1000 Fundraising

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35 Miss. Admin. Code Pt. 4, R. 1001 Rule 1001

An exemption from Sales and Use Tax is provided under Miss. Code Ann. Section 27-65- 111 (cc) for purchases made for the sole purpose of raising funds for a school or organization affiliated with a school.

35 Miss. Admin. Code Pt. 4, R. 1002 Rule 1002

When purchasing tangible personal property used solely for raising funds it is the responsibility of the purchaser to sign The Affidavit for Purchase of Fundraising Materials. Upon signing the affidavit the purchaser attests that they meet the requirements for exemption under Miss. Code Ann. Section 27-65-111(cc) and that they assume responsibility for payment of the tax if the requirements for exemption are not met. A representative of the school or affiliated organization must also sign the affidavit attesting that they are to be the beneficiary of any funds raised. This affidavit can be found on the Department of Revenue website.

35 Miss. Admin. Code Pt. 4, R. 1005 (Reserved)

35.IV.13.02 revised effective April 1, 2008 35.IV.13.02 revised effective July 1, 2009 35.IV.13.02 revised effective July 13, 2012 35.IV.13.02 revised effective April 27, 2017

Chapter 03 Burial of Human Bodies

35 Miss. Admin. Code Pt. 4, R. 100 Rule 100

Pursuant to Miss. Code Ann. Section 27-65-111(c) sales of coffins, caskets, vaults, urns, clothing, embalming aids and appliances, burial pouches and other materials used in the preparation of human bodies for burial or buried with the human body are exempt from sales tax.

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

Material as used in this rule means any tangible personal property consumed directly in the preparation of a human body for burial and property buried with the body; however, material does not include any property that may be reused.

35 Miss. Admin. Code Pt. 4, R. 102 Rule 102

Cemetery equipment and supplies including but not limited to grave markers and nameplates are taxable at the regular retail rate of tax.

35 Miss. Admin. Code Pt. 4, R. 103 Rule 103

Embalming chemicals, cosmetics, wound filler, restorative wax, ligating and suturing threads and other materials remaining in or on the body are exempt from tax.

35 Miss. Admin. Code Pt. 4, R. 104 Rule 104

Chemicals or materials used to clean the body are exempt from tax, however, chemicals or materials used in the cleaning of equipment, tools and the embalming area are taxable at the regular retail rate of tax.

35 Miss. Admin. Code Pt. 4, R. 105 Rule 105

Disposable items such as gloves, gowns, aprons, needles, scalpels and other property used directly in the preparation of the body for burial are exempt from tax. All property that may be reused is taxable at the regular retail rate of tax.

35 Miss. Admin. Code Pt. 4, R. 106 Rule 106

Books and other property given to the family of the deceased are taxable to the funeral home at the regular retail rate of tax on the purchase price.

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35 Miss. Admin. Code Pt. 4, R. 107 (Reserved)

35.IV.13.03 revised effective January 15, 2019

Chapter 04 Disposal of Waste Tires

35 Miss. Admin. Code Pt. 4, R. 100 Definitions

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

"Motor vehicle" means an automobile, motorcycle, motor home, truck, trailer, semi-trailer, truck tractor and semi-trailer combination, farm equipment, or any other vehicle operated on the roads of this state, used to transport persons or property, and propelled by power other than muscular power, but the term does not include traction engines, road rollers, earth movers, graders, loading and other similar construction equipment requiring oversized tires, any vehicles which run only upon a track, bicycles, or mopeds. Motor vehicle does not include equipment such as bulldozers, motor graders, backhoes, front end loaders or any other equipment not used to transport persons or property upon the roads of this state.

35 Miss. Admin. Code Pt. 4, R. 102 Rule 102

"Tire" means a continuous solid or pneumatic rubber covering encircling the wheel of a motor vehicle whether mounted on or carried in the motor vehicle.

35 Miss. Admin. Code Pt. 4, R. 103 Rule 103

"Retail sales" shall mean and include all sales of new motor vehicle tires to consumers of the tires. Retail sales shall include the value of any tangible personal property manufactured or purchased at wholesale which is withdrawn from the business or stock in trade and is used or consumed within this state in the business or by the owner or by any other person, whether or not in the regular course of business or trade. Retail sale shall also include a sale invoiced to a retailer but delivered to another person who pays for the merchandise upon taking possession.

35 Miss. Admin. Code Pt. 4, R. 104 Rule 104

"Retailer" shall apply to a person making retail sales of new motor vehicle tires.

35 Miss. Admin. Code Pt. 4, R. 105 Rule 105

For purposes of this rule, "motor vehicle leasing dealers" are considered consumers of tires purchased for use on rental or lease motor vehicles.

35 Miss. Admin. Code Pt. 4, R. 106 Rule 106

“Wholesale sale” shall mean sales of new motor vehicle tires to a tire retailer or a tire wholesaler for resale.

35 Miss. Admin. Code Pt. 4, R. 107 Rule 107

“Wholesaler” shall apply to a person making wholesale sales of new motor vehicle tires.

35 Miss. Admin. Code Pt. 4, R. 108 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 200 Levy

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35 Miss. Admin. Code Pt. 4, R. 201 Rule 201

Under Miss. Code Ann. Section 17-17-423, a waste tire fee of one dollar ($1.00) is imposed on each new motor vehicle tire sold with a rim diameter of less than twenty-four (24) inches, and two dollars ($2.00) on each new tire sold with a rim diameter of twenty-four (24) inches or greater. The fee shall be charged by the tire wholesaler to a tire retailer who purchases a motor vehicle tire for resale. Such fee shall be separately stated on the sales invoice to the tire retailer. Tire wholesalers making retail sales of new tires should accrue the one dollar ($1.00) waste tire fee or two dollar ($2.00) waste tire fee on each new tire sold at retail. Tire retailers should accrue the one dollar ($1.00) or two dollar ($2.00) waste tire fee on each new motor vehicle tire purchased from an out of state wholesaler who does not charge the waste tire fee. The tax is to be charged on the last wholesale sale of the tire.

35 Miss. Admin. Code Pt. 4, R. 202 Rule 202

Sales by a tire wholesaler selling tires to a used car dealer is considered a retail sale per paragraph 103, above. The applicable tire fee would be charged to the used car dealer; however the regular retail rate of tax would not apply as the sale is considered a wholesale sale for sales tax purposes.

35 Miss. Admin. Code Pt. 4, R. 203 Rule 203

Tire wholesalers will be provided a resale permit to allow the wholesaler to purchase tires for resale exempt from the waste tire fee.

35 Miss. Admin. Code Pt. 4, R. 204 Rule 204

The waste tire fee shall not be charged on the retail sale to the end customer; however, the seller may recoup the waste tire fee by including the cost of the fee in the selling price of the tires, or by listing the cost of the fee as a, “Reimbursement of waste tire fee” on the sales invoice. The amount recouped by the seller is subject to sales tax as part of the gross proceeds of the sale of new tires.

35 Miss. Admin. Code Pt. 4, R. 205 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 300 Filing Requirements

35 Miss. Admin. Code Pt. 4, R. 301 Rule 301

The fee imposed, less five percent (5%) of fees collected or accrued, which shall be retained by the tire wholesaler as collection costs, shall be reported and paid to the Department of Revenue electronically through TAP using the Tire Disposal Fee return. The return with remittance is due and payable on or before the twentieth day of the month next succeeding the close of the period in which the fee accrues. This fee is not to be reported on the sales tax return.

35 Miss. Admin. Code Pt. 4, R. 302 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 400 Exemptions

35 Miss. Admin. Code Pt. 4, R. 401 Rule 401

No fee is due on new tires already mounted on new or used motor vehicles held by motor vehicle dealers for retail sale.

35 Miss. Admin. Code Pt. 4, R. 402 Rule 402

No fee is due on the sale of recaps, retreads or any other used motor vehicle tire.

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35 Miss. Admin. Code Pt. 4, R. 403 Rule 403

The exemptions or exceptions contained in the Sales Tax Law do not apply to the waste tire fee.

35 Miss. Admin. Code Pt. 4, R. 404 (Reserved)

35.IV.13.04 revised effective October 16, 2021

Chapter 05 Auctions, Flea Markets, Antique Malls and Other Similar Establishments

35 Miss. Admin. Code Pt. 4, R. 100 Auctions

35 Miss. Admin. Code Pt. 4, R. 101 Rule 101

An Auctioneer is a person who owns tangible personal property or to whom tangible personal property has been consigned and who offers tangible personal property for sale at auction.

35 Miss. Admin. Code Pt. 4, R. 102 Rule 102

For the purpose of an auction, gross proceeds of sales are the total amount received without any deductions for commissions.

35 Miss. Admin. Code Pt. 4, R. 103 Rule 103

Auctioneers either operating from an established place of business or regularly engaged in auctions or licensed as an auctioneer with the State of Mississippi or any other state are considered to be in the business of selling tangible personal property. Sales tax is due on the gross receipts from such sales regardless of how such tangible personal property may have been acquired, or by whom it may be owned.

35 Miss. Admin. Code Pt. 4, R. 104 Rule 104

Persons or entities operating from an established place of business or regularly engaged in operating Estate Sales are considered to be in the business of selling tangible personal property. Sales tax is due on the gross receipts from such Estate Sales regardless of how such tangible personal property may have been acquired, or by whom it may be owned.

35 Miss. Admin. Code Pt. 4, R. 105 Rule 105

In cases where inventory items held for sale are auctioned at the closure of a business, sales taxes due from the sales of such items are reported through the sales tax account of the business and not by the auctioneer.

35 Miss. Admin. Code Pt. 4, R. 106 Rule 106

An auctioneer, unless meeting the requirements for a dealer and Designated Agent, will not be responsible for collecting sales tax on motor vehicles sold through the auction. Under Miss. Code Ann. Section 27-65-201, motor vehicles sold between non-dealers are subject to a 5% casual sales tax. The county tax collector for the county, in which the motor vehicle will be registered, is responsible for collecting this tax unless a dealer is involved in the transaction. If a dealer is involved in the transaction, the dealer is responsible for collecting and remitting the appropriate sales tax.

35 Miss. Admin. Code Pt. 4, R. 107 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 200 Flea Markets, Antiques Malls and Promoted Events

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35 Miss. Admin. Code Pt. 4, R. 201 Rule 201

Flea Markets and Antiques Malls are businesses where nonpermanent spaces are rented to participants for the sale or exchange of secondhand articles, antiques and crafts. The participants may rent these nonpermanent spaces on a daily, weekly or monthly basis. A fee may or may not be charged to prospective buyers for admission to the area where such property is offered or displayed for sale or exchange.

35 Miss. Admin. Code Pt. 4, R. 202 Rule 202

Promoted Events include, but are not limited to, community festivals, craft shows, seasonal shows, music festivals, and other similar events. These events may include multiple vendors selling tangible personal property, including food or drink.

35 Miss. Admin. Code Pt. 4, R. 203 Rule 203

The owner/promoter/operator of a flea market, antique mall or promoted event is the seller and is responsible for collecting and remitting the sales tax collected by dealers, salespersons or individuals selling at such events. Any vendor who holds a retail sales tax permit should not report tax from an event under his/her number. All taxes collected from these establishments or events must be reported by the owner/promoter/operator.

35 Miss. Admin. Code Pt. 4, R. 204 (Reserved)

35 Miss. Admin. Code Pt. 4, R. 300 Consignment or Broker Sales

35 Miss. Admin. Code Pt. 4, R. 301 Rule 301

The consignee or broker (licensed retailer or wholesaler) is liable for the sales tax on sales of tangible personal property that was consigned, delivered or entrusted to him regardless if the broker or consignee acquires possession or if the consignor retains title or not.

35 Miss. Admin. Code Pt. 4, R. 302 (Reserved)

35.IV.13.05 revised effective August 15, 2008

Part 5 Gaming

35 Miss. Admin. Code Pt. 5, R. 100 Rule 100

The Commissioner of the Department of Revenue, or his designee, pursuant to Section 75- 76-81 of the Gaming Control Act, shall have the authority to: 1. Conduct periodic audits or reviews of the books and records of licensees; 2. Review the accounting methods and procedures used by licensees; 3. Review and observe methods and procedures used by licensees to count and handle cash, chips, tokens, negotiable instruments, and credit instruments; 4. Examine all accounting and bookkeeping records and ledger accounts of the licensee or a person controlling, controlled by, or under common control with the licensee; 5. Examine the books and records of any licensee when conditions indicate the need for such action or upon the request of the Gaming Commission; and 6. Investigate each licensee's compliance with the Gaming Control Act and other regulations as it relates to taxes, internal controls or auditing procedures.

35 Miss. Admin. Code Pt. 5, R. 101 (Reserved)

35.V.1.01 revised effective January 1, 2021

Chapter 02 Records

35 Miss. Admin. Code Pt. 5, R. 100 Rule 100

Under authority of Miss. Code Ann. Sections 75-76-81 and 27-65-43, it is the duty of every taxpayer, or gaming licensee, in such manner as the Commissioner of Revenue may approve or require, to keep accurate, complete, legible, and permanent records of all transactions pertaining to revenue that is taxable or subject to fees. Records must be supported by source documents. The Commissioner may require any information or records from computer information systems on media common to those systems.

35 Miss. Admin. Code Pt. 5, R. 101 Rule 101

Records for each taxpayer, or gaming licensee, should accurately reflect gross income and expenses relating to its gaming operations.

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35 Miss. Admin. Code Pt. 5, R. 102 Rule 102

If a taxpayer, or gaming licensee, fails to keep the records used by it to calculate gross gaming revenue, the Department may compute and determine the amount of taxable revenue upon the basis of an audit and upon the basis of any information within its possession, or upon statistical analysis.

35 Miss. Admin. Code Pt. 5, R. 103 Rule 103

When requested in writing, all records relating to gross income and expenses shall be provided to the Commissioner of Revenue in a reasonable and timely manner. In addition, any records or documents submitted by the licensee to the Mississippi Gaming Commission shall be made available to the Commissioner of Revenue or his authorized agent upon written request.

35 Miss. Admin. Code Pt. 5, R. 104 (Reserved)

35.V.1.02 revised effective January 1, 2021

Subpart 2 Administrative

Chapter 01 Bond Required

35 Miss. Admin. Code Pt. 5, R. 100 Rule 100

Before any applicant is licensed, he is required to enter into a bond in an amount fixed by the Commissioner of the Department of Revenue, payable to the State of Mississippi, conditioned upon the payment of all license fees, taxes, penalties, interest or fines and the faithful performance of all requirements imposed by law or regulation, or the conditions of the license.

35 Miss. Admin. Code Pt. 5, R. 101 Rule 101

An estimate will be made to calculate the amount for the initial bond based on the expected tax payments to be made by the taxpayer/licensee, but in no case shall the bond amount for the gaming licensee be less than $250,000. The amount of the bond for each licensed manufacturer and for each licensed distributor or seller shall not be less than $5,000. If a person holds both a manufacturer's and a distributor's or seller's license, the amount of the bond shall not be less than $10,000.

35 Miss. Admin. Code Pt. 5, R. 102 Rule 102

The amount of the gaming licensee’s bond shall be calculated based upon the licensee’s liability for two (2) weeks of all gaming taxes, one (1) month sales tax, use tax and withholding tax liabilities, but in no case shall the bond amount be less than $250,000. The amount of the manufacturer’s or distributor’s bond shall be calculated based on any tax liabilities due to the State of Mississippi for an average three (3) month period. The bond amount will be reviewed once a year by the Commissioner or his designated agent to determine if it is sufficient. The Commissioner will give the taxpayer/licensee a sixty (60) day notice when they are required to increase the amount of the bond.

35 Miss. Admin. Code Pt. 5, R. 103 Rule 103

Such bond shall be made in a surety company authorized to do business in the State of Mississippi and shall be approved by the Commissioner. The Commissioner shall be authorized to institute suit in the proper court on said bond for any violations of the conditions of said bond.

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35 Miss. Admin. Code Pt. 5, R. 104 Rule 104

The replacement bond, or the continuation certificate issued on the existing bond, must be received by the Commissioner no later than ten days before the bond expiration date. The absence of a proper bond could result in revocation of the gaming license.

35 Miss. Admin. Code Pt. 5, R. 105 Rule 105

In lieu of the bond, an applicant may deposit with the Department a secured financial instrument as authorized by the Department. The security, provided in the form of a certificate of deposit, must state that the amount is unavailable for withdrawal except upon order of the Commissioner of the Department of Revenue.

35 Miss. Admin. Code Pt. 5, R. 106 (Reserved)

35.V.2.01 revised effective January 1, 2021

Chapter 02 Due Dates of Gaming and License Fees

35 Miss. Admin. Code Pt. 5, R. 100 Rule 100

Taxes and fees required under the Mississippi Gaming Control Act, and other local government gaming taxes and license fees which are collected by the Department of Revenue (Department), and all reports relating thereto must be received by the Department not later than the due date specified by law or regulation, and in accordance with the Department of Revenue Rules for Administration of Mississippi Code 27-3-81 which authorizes the Department to require certain taxpayers to remit taxes by electronic transfer of funds. All other gaming tax or fee payments shall be timely filed if received by the Department, on or before the due date as prescribed by law or regulation.

35 Miss. Admin. Code Pt. 5, R. 101 Rule 101

The final return for the fees or taxes upon gross revenues, which includes all municipal or county fees, is due on the 20th day of the month following the month in which the tax accrues. This return shall be a reconciliation of weekly reports and prepayments or deposits made by the licensee. 1. A weekly report shall be made to the Department which identifies all gross revenues from slot machines, table games and card games and all other gaming revenue for the week which shall begin Sunday and end on Saturday. A prepayment or deposit of the fees and taxes due for the week must be included with the report. The report and the fee deposit must be received by the Department no later than 5:00 p.m. Friday of the following week. 2. When a month's end falls within a week, the licensee shall prepare a weekly report through the last day of the month, and another report beginning the first day of the month. The licensee may remit his prepayments for the partial weeks together through the electronic funds transfer. Penalty and interest will be due on any deposits and/or reports not received by Friday of the following week. 3. The licensee's reconciliation return for the month should indicate any corrections for the weekly reports and provide final gross revenue figures for the month. If the licensee has underpaid his tax, the licensee is required to remit the additional tax with the return. No interest or penalty will be due on the additional payment provided that the return is filed timely and that the total additional payment does not exceed 5% of the total liability for the month.

Page 4 of 5 4. If the licensee has overpaid his tax, then he will be allowed to take credit for that overpayment. The Department will provide a letter of credit to the licensee to be attached to his report or return as verification of the credit amount. 5. If a licensee fails to report his weekly earnings and remit his weekly deposit at the time provided, the Department shall issue a jeopardy assessment and warrant following administrative procedures as provided for by Miss. Code Ann. Sections 75-76-81, 27-65-61, 27-65-63 and 27-65-65.

35 Miss. Admin. Code Pt. 5, R. 102 Rule 102

The application fee of $5,000 for a license to conduct gaming is to be paid to the Department on or before filing an application, and every three (3) years thereafter.

35 Miss. Admin. Code Pt. 5, R. 103 Rule 103

The license fee of $5,000 shall be paid to the Department within ten (10) days of the issuance of the gaming license by the Gaming Commission, and annually thereafter on the original anniversary date of that license.

35 Miss. Admin. Code Pt. 5, R. 104 Rule 104

The license fee determined by the number of games, and any local fee determined by the number of games, is to be paid by the applicant for a state gaming license on or before filing an application. These fees are to be paid annually thereafter for continuation of the gaming license and shall be due on the original anniversary date of the issuance of the license.

35 Miss. Admin. Code Pt. 5, R. 105 Rule 105

If new games are added after the annual license fee based on the number of games has been reported and paid, a supplemental report shall be filed and the additional fee shall be paid before putting the new games into play. The additional fee paid for a period less than twelve (12) months shall be the proportionate amount of the annual license fee that the number of months remaining bears to twelve (12) months.

35 Miss. Admin. Code Pt. 5, R. 106 Rule 106

At the receipt of the gaming license fees due by the applicant, the Department shall notify the Executive Director of the Gaming Commission that the fee has been paid and the amount paid.

35 Miss. Admin. Code Pt. 5, R. 107 Rule 107

Failure to pay penalties and/or fees by the due date could result in closure of the establishment.

35 Miss. Admin. Code Pt. 5, R. 108 (Reserved)

35.V.2.02 revised effective January 1, 2021

Chapter 03 Distribution of Local Government Fee

35 Miss. Admin. Code Pt. 5, R. 100 Rule 100

This regulation is to prescribe the method that will be used to determine the pro rata portion of tax revenues, collected under the authority of Miss. Code Ann. Section 75-76-195, which will be forwarded to the counties and municipalities in the event a municipality annexes previously unincorporated territory. This methodology would also apply if a municipality contracts its corporate limits.

Page 5 of 5 101 Miss. Code Ann. Section 75-76-197 requires that the Local Government Fee collected under the provisions of Miss. Code Ann. Section 75-76-195 be distributed as follows: 1. If the licensed gaming establishment is not located within an incorporated municipality, then the entire proceeds of the tax received shall be forwarded to the county in which the establishment is located. 2. If the licensed gaming establishment is located within an incorporated municipality, then the proceeds of the tax received shall be forwarded to the municipality in the proportion that the population of the municipal corporation bears to the entire population of the county, and to the county in proportion to the population of the county outside of the municipal corporation bears to the entire population of the county. The populations for the municipality and for the county shall be determined by the most recent federal census.

35 Miss. Admin. Code Pt. 5, R. 102 Rule 102

When an incorporated municipality extends its boundaries through annexation of unincorporated territory thereby increasing the population of the incorporated municipality, then such municipality may petition the Commissioner requesting that he amend the tax computation to reflect the population growth resulting from the annexation according to the population figures for the annexed area contained in the most recent federal census. The municipality must provide to the Commissioner a statement from the United States Department of the Census providing the post annexation population results. The municipality must also provide to the Commissioner a certified copy of the decree that ratifies, approves and confirms the annexation as filed with the Secretary of State.

35 Miss. Admin. Code Pt. 5, R. 103 Rule 103

The Commissioner shall recalculate the percentages and shall use the revised percentages to determine the tax to be returned to the municipality and to the county and which revised calculations shall become effective the first day of the month, but no less than thirty (30) days, following notification to the Commissioner and provision of the required documentation.

35 Miss. Admin. Code Pt. 5, R. 104 Rule 104

At the time of enactment of this regulation, the effective date for establishment of the revised calculation for any municipality which has petitioned the Commissioner and has provided the required documentation, shall be the first day of the month following final approval and adoption of this regulation.

35 Miss. Admin. Code Pt. 5, R. 105 (Reserved)

35.V.2.03 revised effective January 1, 2021

Part 6 Property

35 Miss. Admin. Code Pt. 6, R. 101 Rule 101

(Reserved) 35.VI.1.01 revised effective September 4, 2025 Chapter 02 Motor Vehicle Assessments 100 Pursuant to Miss. Code Ann. Section 27-51-19, the Department is required to annually prepare and adopt an assessment schedule for motor vehicles. In preparing this schedule, the Department shall use a computer system package of assessments identified by the vehicle identification number ("VIN"). If the VIN does not produce an assessed value or if the computer system is not in operation, the local tax collector shall use the manufacturer’s suggested retail price ("MSRP") with the applicable depreciation percentage for the year in which the vehicle was manufactured.

35 Miss. Admin. Code Pt. 6, R. 101 Rule 101

The local tax collector shall be responsible for obtaining a source of MSRP(s) except for new vehicles. The taxpayer shall be responsible for supplying the MSRP for a new vehicle, by submitting a copy of the window sticker with the MSRP, to the tax collector at the time the tag is purchased.

35 Miss. Admin. Code Pt. 6, R. 102 Rule 102

The Department will annually furnish to each tax collector an assessment schedule for trailers, motorcycles, special equipment, etc. to be used in the assessment of these types of property. This schedule will be furnished in hard copy, or the Department may use a computer system package of assessments identified by the VIN. If the VIN does not produce an assessed value or if the computer system is not in operation, the local tax collector shall use the MSRP with the applicable depreciation percentage for the year in which the vehicle was manufactured. For any model not listed, the tax collector shall assess at thirty percent (30%) of current value if known or use the “cost when new” multiplied by the percentages listed in the schedule for the years listed.

35 Miss. Admin. Code Pt. 6, R. 103 (Reserved) 35.VI.1.02 revised effective September 4, 2025

Chapter 03 Exemption for Livestock Feed 100 Miss. Code Ann. Section 27-31-1(i) exempts for one (1) year all cottonseed, soybeans, oats, rice and wheat. The Department interprets this provision to include and exempt materials or products used to feed livestock such as cattle, oxen, sheep, goats, hogs,

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horses, mules, asses, fish, and poultry. This exemption would also include other materials or products such as corn when used as an ingredient in livestock feed.

35 Miss. Admin. Code Pt. 6, R. 101 (Reserved) 35.VI.1.03 revised effective September 4, 2025

Chapter 04 Exemption for New Enterprises

35 Miss. Admin. Code Pt. 6, R. 100 Rule 100

Pursuant to the provisions of Miss. Code Ann. Sections 27-31-101 et seq., the county board of supervisors and municipal authorities are authorized to grant exemptions from ad valorem taxation under certain circumstances. The decision as to whether a particular taxpayer satisfies the statutory conditions for said exemption should be first made by the local authorities and then reviewed by the Department.

35 Miss. Admin. Code Pt. 6, R. 101 Rule 101

In order for the Department to review and/or consider an exemption, the following information must be submitted: 1. The original and three (3) copies of the application submitted by the taxpayer to the local governing authorities requesting the exemption. The application should contain an itemization of all property to be exempted and the true value for each item of property. 2. A resolution from the board of supervisors and/or municipal authorities granting the ad valorem tax exemption. 3. A position statement of the county tax assessor.

35 Miss. Admin. Code Pt. 6, R. 102 Rule 102

(Reserved) 200 Industrial Exemptions 201 Any request for an industrial exemption filed pursuant to Miss. Code Ann. Section 27-31- 105 with a date of completion on or after July 1, 1995, will be considered under the terms of House Bill 939 adopted by the 1995 regular session of the Mississippi Legislature.

35 Miss. Admin. Code Pt. 6, R. 202 Rule 202

Projects completed before July 1, 1995, will be governed under the language as it existed prior to the amendment.

35 Miss. Admin. Code Pt. 6, R. 203 Rule 203

The municipalities may grant like exemptions from municipal ad valorem taxation for a period not exceeding ten (10) years to all manufacturers and other new enterprises mentioned in Miss. Code Ann. Sections 27-31-101 through 27-31-117.

35 Miss. Admin. Code Pt. 6, R. 204 Rule 204

Any request from an enterprise (new or existing) for an industrial exemption from ad

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valorem taxation situated inside a municipality shall be timely filed with the municipal authorities in addition to the county authorities. 205 (Reserved)

35.VI.1.04 revised effective September 4, 2025

Chapter 05 Exemption for All-Terrain Vehicles (“ATVs”)

35 Miss. Admin. Code Pt. 6, R. 101 Rule 101

For the purposes of this exemption, ATV is defined as a motor vehicle that is designed for off-road use and is not required to have a motor vehicle privilege license. ATV includes utility task vehicles (“UTVs”), also known as side-by-sides. ATV does not include electric bicycles.

35 Miss. Admin. Code Pt. 6, R. 102 Rule 102

From and after January 1, 2026, an ATV is exempt from ad valorem tax when held by a retailer on a consignment or floor plan basis.

35.VI.1.05 revised effective September 4, 2025

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Subpart 02 Equalization

Chapter 01 Qualification for Expenditure of Funds

35 Miss. Admin. Code Pt. 6, R. 100 Rule 100

To qualify for the expenditure of funds pursuant to Section 27-35-165, of Mississippi Code of 1972: 1. Plans for reappraisal by any county must contain a provision that the reappraisal work will be performed in conformity with the guidelines established in the appraisal manuals of the Mississippi State Tax Commission. 2. Any contract for reappraisal entered into by a county must contain a provision that the reappraisal work will be performed in conformity with the guidelines established in the appraisal manuals of the Mississippi State Tax Commission.

35 Miss. Admin. Code Pt. 6, R. 101 (Reserved)

Chapter 02 Certification of Counties for Expenditure of Special Levy

35 Miss. Admin. Code Pt. 6, R. 100 Rule 100

Section 27-39-329, Mississippi Code of 1972, requires that each county shall levy an ad valorem tax of one (1) mill upon all taxable property of the county, beginning with taxes levied for the fiscal year 1983. The avails of and interest on such taxes may not be expended during any fiscal year unless the county has been certified by the State Tax Commission to be in compliance with said section.

35 Miss. Admin. Code Pt. 6, R. 101 Rule 101

Application for certification made by any county must show that all the following requirements have been fulfilled in conformity with guidelines established in Tax Commission Appraisal Manuals: 1. Reappraisal of all property 2. Appraisal and assessment records being maintained 3. Ownership-mapping system established 4. Certified appraisers employed (Counties with not more than 5,000 homestead exemption applications must have one; counties with more than 5,000 must have two)

35 Miss. Admin. Code Pt. 6, R. 102 Certification must be made before the beginning of each fiscal year

35 Miss. Admin. Code Pt. 6, R. 103 (Reserved)

Chapter 03 Certified Appraisers

35 Miss. Admin. Code Pt. 6, R. 100 Rule 100

Miss. Code Ann. Section 27-3-52, provides that the Mississippi State Tax Commission shall set forth the minimum requirements for which county tax assessors and/or their assistants, appropriate state employees, employees of planning and development districts, or other persons may attain certification as an appraiser.

35 Miss. Admin. Code Pt. 6, R. 101 Rule 101

Individuals may attain certification by attending and satisfactorily completing the Mississippi Education and Certification Program (MECP) or by passing a challenge basis

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comprehensive examination. A higher level of certification or expertise may be required to contract for the reappraisal of property or for property appraisals as set forth below.

35 Miss. Admin. Code Pt. 6, R. 102 (Reserved)

35 Miss. Admin. Code Pt. 6, R. 200 Rule 200

Certification for county tax assessors and/or their assistants, appropriate state employees, and employees of planning and development districts.

35 Miss. Admin. Code Pt. 6, R. 201 Rule 201

Initial certification will be approved for county tax assessors and/or their assistants, appropriate state employees, and employees of planning and development districts for those individuals who attend and satisfactorily complete the MECP taught by the Mississippi State Tax Commission or who pass a challenge basis comprehensive examination on the following subjects of instruction, but not limited to: 1. Mapping 2. Appraisal of Residential Property 3. Appraisal of Personal Property 4. Appraisal of Commercial Property 5. Urban and Agricultural Land Valuation 6. Maintenance and Updating Procedures 7. Cost Index and Ratio Studies 8. Property Tax (Land) Rolls

35 Miss. Admin. Code Pt. 6, R. 202 Rule 202

The MECP will encompass all, but is not limited to, the above subjects and will be taught or presented by the Mississippi State Tax Commission. The expense for attending the program will be borne by the County according to Miss. Code Ann. Section 27-3-52. The challenge basis comprehensive examination is principally for experienced appraisers who submit appropriate justification to the Mississippi State Tax Commission and may be attempted only once.

35 Miss. Admin. Code Pt. 6, R. 203 Rule 203

Certification for subsequent fiscal years shall be attained by mandatory attendance of a recertification course of instruction taught or presented by the Mississippi State Tax Commission or its designee or by attendance of the International Association of Assessing Officers’ courses as designated by the Advisory Board to the MECP.

35 Miss. Admin. Code Pt. 6, R. 204 Rule 204

The administrative procedures of the mandatory attendance requirements shall be established and monitored by the Advisory Board to the MECP, or its designee(s).

35 Miss. Admin. Code Pt. 6, R. 205 (Reserved)

35 Miss. Admin. Code Pt. 6, R. 300 Certification for all other persons

35 Miss. Admin. Code Pt. 6, R. 301 Rule 301

When work is performed under the direction of the county tax assessor, initial certification will be approved for the individual primarily responsible for the contract at a private firm or for a private consultant having a minimum of five (5) years of mass appraisal experience and who attends and successfully completes all qualifications pursuant to the MECP and receives the certification level of Mississippi Assessment

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Evaluator (MAE) when the work is performed pursuant to Miss. Code Ann. Section 27- 35-165(2)(a) or (b).

35 Miss. Admin. Code Pt. 6, R. 302 Rule 302

When work is not performed under the direction of the county tax assessor, initial certification will be approved for the individual primarily responsible for the contract at a private firm or for a private consultant who is a state certified real estate appraiser as defined in Miss. Code Ann. 73-34-3 having a minimum of five (5) years of mass appraisal experience and who attends and successfully completes all qualifications pursuant to the MECP and receives the certification level of MAE and the work is performed pursuant to Miss. Code Ann. Section 27-35-165(2)(a) or (b).

35 Miss. Admin. Code Pt. 6, R. 303 Rule 303

Additional personnel may perform work under a contract with a private firm or under the direction of a private consultant pursuant to Miss. Code Ann. Section 27-35-165(2)(a) or (b) if the additional personnel attend and successfully complete all qualifications pursuant to the MECP and receive certification and are working directly under a person with five years of mass appraisal experience and certification as a MAE.

35 Miss. Admin. Code Pt. 6, R. 304 Rule 304

Certification for subsequent fiscal years shall be attained by mandatory attendance of a recertification course of instruction taught or presented by the Mississippi State Tax Commission or its designee or by attendance of the International Association of Assessing Officers courses as designated by the Advisory Board to the MECP and by maintaining the status of a state certified real estate appraiser if required for initial certification.

35 Miss. Admin. Code Pt. 6, R. 305 Rule 305

The administrative procedures of the mandatory attendance requirements shall be established and monitored by the Advisory Board to the MECP, or its designee(s).

35 Miss. Admin. Code Pt. 6, R. 306 (Reserved)

35.VI.2.03 revised effective August 15, 2008

Chapter 04 Appraisals by Private Firms and Consultants

35 Miss. Admin. Code Pt. 6, R. 100 Rule 100

The work of a private firm contracting with any county of the State of Mississippi for the reappraisal of property or for property appraisal updates to be performed under the direction of the county tax assessor in connection the assessment of Mississippi Ad Valorem taxes must be performed under the direction of a field supervisor with the following experience and professional certifications: 1. Not less than five years experience in mass appraisal of land, residences, commercial property and personal property as an appraiser or supervisor. The experience requirements may be met in total within five years if the individual had responsibility in all four areas of mass appraisal. Private firms contracting solely for the purpose of performing real property appraisals shall not be required to have experience with appraisal of personal property but shall be required to have not less than five years experience with the mass appraisal of land, residences and commercial property. Private firms contracting solely for the purpose of

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performing personal property appraisals shall not be required to have experience with appraisal of land, residences and commercial property but shall be required to have not less than five years experience with the mass appraisal of personal property 2. Additionally, such person must have obtained the Certified Appraiser certification and an Assessor Evaluator II designation prior to placing a performance bid. To perform contracts beginning on or after October 1, 2007, such person must have a Mississippi Assessment Evaluator (MAE) certification. Certified Appraiser, AE1, AE2 and MAE are certifications of the Mississippi Education and Certification program which is a joint effort of the Mississippi State Tax Commission, the Center for Governmental Technology at Mississippi State University and the Mississippi Assessors and Collectors Association.

35 Miss. Admin. Code Pt. 6, R. 101 Rule 101

Each person employed or otherwise engaged to appraise property under the direction of the field supervisor described above shall be certified by the Mississippi State Tax Commission as a Certified Appraiser. New employees hired to work for the firm must attain certification by the ending date of the first certification school held after the hiring of the employee. Until certified, the new employee must work daily with an appraiser certified by the State Tax Commission.

35 Miss. Admin. Code Pt. 6, R. 102 Rule 102

When a private consultant is hired to perform certain functions of the work of reappraisal of property or property appraisal updates and the work is to be performed under the direction of the county tax assessor, the private consultant and each person employed or otherwise engaged by such private consultant to appraise property shall be certified by the Mississippi State Tax Commission as a Certified Appraiser.

35 Miss. Admin. Code Pt. 6, R. 103 Rule 103

When a private firm is hired by the Board of Supervisors of any county of the State of Mississippi for the reappraisal of property or for property appraisal updates and the work is not performed under the direction of the county tax assessor, all personnel employed or otherwise engaged by the private firm to appraise property shall be under the direction of a field supervisor who is a state certified real estate appraiser as defined in Section 73- 34-3 of the Mississippi Code of 1972. When a private consultant is hired by the Board of Supervisors of any county of the State of Mississippi to perform certain functions of the reappraisal of property or for property appraisal updates, and the work is not to be performed under the direction of the county tax assessor, the private consultant shall be a state certified real estate appraiser as defined in Section 73-34-3 of the Mississippi Code of 1972. Any such field supervisor or private consultant shall have the following experience and professional certifications: 1. Not less than five years experience in mass appraisal of land, residences, commercial property and personal property as an appraiser or supervisor. The experience requirement may be met in total within five years if the directing appraiser or private consultant had responsibility in all four areas of mass appraisal. Private firms or Private Consultants contracting solely for the purpose of performing real property appraisals shall not be required to have experience with appraisal of personal property but shall be required to have not less than five years experience with mass appraisal of land, residences and commercial property.

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Private firms or private consultants contracting solely for the purpose of performing personal property appraisals shall not be required to have experience with appraisal of land, residences and commercial property but shall be required to have not less than five years experience with mass appraisal of personal property. 2. Additionally, such person must have obtained the Certified Appraiser certification and the Assessor Evaluator II designation prior to placing a performance bid. On and after October 1, 2007, such person shall be certified by the State Tax Commission and hold a Mississippi Assessment Evaluator designation to bid on county appraisal contracts with the Board of Supervisors.

35 Miss. Admin. Code Pt. 6, R. 104 Rule 104

Not withstanding the qualifications listed above, a licensed appraiser of any state in the United States, or a Certified Assessment Evaluator (CAE) as designated by the International Association of Assessing Officers, or any person holding MAI designation from the Appraisal Institute may apply to the Property Tax Office of the State Tax Commission to perform specialized appraisals if he/she can document expertise in such appraising. The State Tax Commission will determine if the documented expertise is adequate, and if so, will grant authority to appraise special property.

35 Miss. Admin. Code Pt. 6, R. 105 (Reserved)

Chapter 05 Qualifications for Class I Property

35 Miss. Admin. Code Pt. 6, R. 100 Rule 100

Class I Property (Single Family Owner Occupied, Residential Real Property) shall be assessed at a ratio of ten percent (10%) of true value. Property qualifying for homestead exemption is prima facie Class I property except as provided below.

35 Miss. Admin. Code Pt. 6, R. 101 Rule 101

There is no maximum nor minimum acreage prescribed for Class I property. The amount of acreage which is used for residential purposes is a question of fact to be determined on a case by case basis by the county assessor.

35 Miss. Admin. Code Pt. 6, R. 102 Rule 102

Property enjoying the benefits of the application of "Agricultural Use Value" shall not, by definition, be eligible for the application of the benefits of Class I Property.

35 Miss. Admin. Code Pt. 6, R. 103 Rule 103

Multi-family housing such as duplexes, triplexes and apartments of a commercial nature are not eligible, in whole or part, for classification as Class I Property.

35 Miss. Admin. Code Pt. 6, R. 104 Rule 104

Condominium Housing, wherein each single family unit is occupied by the owner and/or his or her family, is eligible for classification as Class I Property.

35 Miss. Admin. Code Pt. 6, R. 105 Rule 105

Property owned by multiple persons is not eligible for treatment as Class I Property unless the owners are related in the third degree and are otherwise eligible.

35 Miss. Admin. Code Pt. 6, R. 106 Rule 106

Military personnel on temporary duty in Mississippi who have declared their permanent residence to be in another state, but who own and occupy their home in Mississippi, are eligible to have their home treated as Class I Property if it is otherwise qualified.

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35 Miss. Admin. Code Pt. 6, R. 107 Rule 107

Property otherwise eligible for treatment as Class I Property is not disqualified by virtue of multiple generations of the same family occupying the same home or multiple homes on land held in common.

35 Miss. Admin. Code Pt. 6, R. 108 Rule 108

Agricultural buildings, as defined in the State Tax Commission manual "Appraisal of Rural Structures", wherever located, will be treated as Class II Property.

35 Miss. Admin. Code Pt. 6, R. 109 Rule 109

The land roll will depict Class I and Class II Property separately. In the first column, immediately under the brief legal description, the Class I portion of the parcel will be shown in the following sequence and on a single line: Land (or L); improvements (or I); Total (or T)

35 Miss. Admin. Code Pt. 6, R. 109.01 Rule 109.01

The Class II portion, if applicable, will be shown in the same sequence in the next line. Each line will be clearly denoted as to class of property. A third line will depict a total of the two classes of the parcel, if applicable. All columns to the right will reflect the appropriate data by class or as totals of the two classes. All printing of this information on the property rolls shall be at a rate of 6 lines per inch.

35 Miss. Admin. Code Pt. 6, R. 110 Rule 110

The "Page of Pages Recapitulation" will result from a footing of each column's totals for parcels from each page. No separate breakdown by class is necessary.

35 Miss. Admin. Code Pt. 6, R. 110.01 Rule 110.01

The "General Recapitulation" where the values and acreage of such species of property is shown as "cultivatable" and “uncultivatable", will be necessary to depict separately the acreage in the case of land and the value of land, and improvements of Class I and Class II property.

35 Miss. Admin. Code Pt. 6, R. 111 Rule 111

The true value as well as the assessed value for each class of property shall be on the tax receipt or statement.

35 Miss. Admin. Code Pt. 6, R. 112 (Reserved)

Chapter 06 Standards of Acceptance

35 Miss. Admin. Code Pt. 6, R. 100 Rule 100

The following standards of performance will be used by the State Tax Commission in determining the acceptability of the real and personal property rolls in each county: 1. Minimum Requirements for Aerial Photography a. Aerial Photography covering the entire county will be flown periodically and accepted by the county using specifications established by the State Tax Commission. The time interval for flying aerial photography will be determined on a parcel count basis as follows: Parcels of real property Time period -------------------------------------------------------------------- 10,000 parcels and less Within 15 years 10,001 to 20,000 parcels Within 12 years 20,001 parcels and above Within 10 years

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b. The county may appeal to the MSTC for an extension of the time period based on the lack of growth in assessed value, the lack of increased parcels, or the lack of change in use value coverages. Requests for such extensions must be made two (2) years prior to the set time period intervals as described above and the MSTC shall accept or reject in writing the request within ninety (90) calendar days. c. Within two (2) years after acceptance of aerial photography, the county will re-classify or verify all agricultural property according to its current use (cultivatable or uncultivatable). Counties flying multiple times within the designated time frame may request that additional verification of cultivatable or uncultivatable lands not be required. d. Prior to flying new aerial photography the county will contact the MSTC in writing. Minimum photography accuracy will be to the standards of the original ownership base if the original accuracy has been approved by the MSTC. MSTC approval of the original accuracy must be submitted to the county within ninety (90) calendar days after the county notifies the MSTC of its intent to fly new aerial photography. e. USGS Digital Orthophoto Quadrangles (DOQ'S) will be considered acceptable photography for rural areas only. 2. Minimum Requirements for Mapping a. Counties shall acquire and maintain a proper ownership mapping system performed over an appropriate aerial photography base. Ownership maps and aerial photos will be maintained as separate products but will be required to overlay and correlate. Once aerial photography is flown and accepted, the county must submit a plan acceptable to the MSTC to complete ownership map revisions. b. Originals or copies of current ownership maps and aerial photography must be housed in the Assessor's office. c. Upon flying new photography, the accepted map scales for ownership mapping are as follows: Minimum scales required Scale Application ----------------------------------------------------------------------------------- 1"=100' Urban Centers/Incorporated Areas 1"=400' Sparse/Moderate Rural Areas

Alternate scales accepted ----------------------------------------------------------------------------------- 1"=50' Downtown Business Districts 1"=200' Populated Rural Areas

Scale requirements must be coordinated with the MSTC prior to flying aerial photography. d. Mapping and related documents and materials will be updated annually to reflect changes such as roads, waterways, transmission lines, pipe lines, and reservoir projects. This update should also include any changes pertaining to

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ownership, acreage, lots, parcel numbers, and exempt properties. e. In counties that have digital mapping systems, Assessors shall have the capability to produce (or reproduce on demand) all documents, maps, photographs, copies, and materials described in these minimum requirements at the prescribed sizes, scales, and formats, and on the prescribed mediums (paper, mylar, etc.). f. All counties will have maps to be used in the field for appraisal purposes. Upon demand, the county shall have the capability to produce and reproduce maps with aerial photo or imagery composites. 3. Personal Property Standards Coming to Standard a. One Hundred Percent Compliance with Title 35 of the Mississippi Administrative Code, Part VI, Subpart 02, Chapter 08 by the 1999 Tax Roll. b. Inventory - All inventories shall be valued annually. The true value of current inventory can be determined as of January 1 [tax lien date] or an average of inventory of the previous twelve (12) months. c. Leased property - Leased property shall be captured annually. The business where the leased property is physically located shall identify said property on its Personal Property Rendition Form. However, the property shall be assessed to the Lessor. The Lessor shall actually render the property and the Assessor shall have a master card which shall correlate back to the business in which the property is located. 4. Maintenance After a county has come into compliance, the maintenance program shall begin and the following shall be done: a. The County shall annually comply with the provisions of Title 35 of the Mississippi Administrative Code, Part VI, Subpart 02, Chapter 08. b. Each county is required to physically review and verify at least 25 percent of all personal property accounts annually. In each subsequent year, an additional 25 percent of the personal property accounts shall be physically reviewed and verified. This process will result in the physical reviewing of 100 percent of all personal property accounts every four years. The 25 percent shall include a fair representation of the various types of personal property accounts located in the county. Each county must be able to identify those parcels reviewed and supply a list of the same to the MSTC. c. Leased equipment shall be updated annually d. Inventory shall be brought current annually. e. New businesses, additions, and deletions shall be captured annually. f. Rendition forms must be maintained and provided to the MSTC upon request. 5. Real Property Minimum Requirements and Standards for Appraisal Updating a. Roll Year 1997 is to be a year of developing and adopting standards and minimum requirements for maintenance of real property appraisal. These standards and minimum requirements should be adopted prior to the first Monday of July 1997; or as soon thereafter, as possible. Roll year 1998, or year set by the MSTC, is to be governed by existing standards of compliance pursuant to Miss. Code Ann. §27-35-113 and Property Tax Bureau Title 35 of

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the Mississippi Administrative Code, Part VI, Subpart 02, Chapter 06 as developed by the MSTC. Roll year 1998, or year set by the MSTC, is to serve as the benchmark year for a four-year update cycle. Counties that are presently under an Order, any county that may be placed under an Order, or those counties voluntarily updating may have differing cycle dates from 1998. A county can develop and use an update cycle of less than four (4) years but no update cycle shall be allowed beyond four (4) years. b. Assessors and Board of Supervisors that prefer to use contractors will take full responsibility that the contractor is complying with all standards and minimum requirements set forth by the MSTC. The MSTC will no longer approve individual contracts. c. The MSTC will afford counties adequate time to get into compliance with the statutes of the State of Mississippi that must be enforced by the MSTC. d. As soon as possible after the adoption of the standards and minimum requirements, all counties shall prepare and maintain a current sales file. Beginning with the appropriate land roll, as set by the MSTC, and not to exceed every four (4) years, each county shall develop and implement a new building index and current land pricing for small tracts and urban land. The index must conform to approved procedures set out by the MSTC. Failure of a county to develop and implement an index by the designated roll year or to develop and implement a new index during any update cycle will mandate the county to implement the regional index supplied by the MSTC. The year 1998 (or year approved by the MSTC) will serve as a benchmark for a four- year appraisal cycle. e. Although the MSTC will not dictate the time table, a county should accomplish various functions of an update. The MSTC will continue to monitor the progress of all counties and continue to do sales ratio studies and audit procedures to assure each county's assessment records comply with acceptable standards. 6. Real Property Minimum Requirements and Standards for Appraisal Maintenance a. Estimate true value as of the value date of January 1 of the year of the upcoming roll of all real property involving changes, additions, or expansions. Additionally, the county should prepare new, add to, or change property appraisal cards as to any errors, omissions, deletions, or additions as required to reflect accurate true value of all land and improvements required to be appraised in accordance with current MSTC guidelines. b. In complying with the four-year update cycle, a county must physically observe, check condition (if necessary) and note on the property records as to the date of observation. One hundred percent of all parcels in the county shall be observed within a four (4) year period. c. At anytime during an update cycle, if the MSTC becomes aware, through an audit or other means, that the county will not be able to timely complete the update, then the MSTC will notify the Board of Supervisors, Assessor, Chancery Clerk, and County Administrator of their findings. If possible, the MSTC will provide the county detailed instructions on what the

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county must do in order to timely complete the update. d. All property records and supporting schedules must be maintained and provided to the MSTC upon request. e. All agricultural land use values will be sent by the MSTC to all assessors in accordance with Miss. Code Ann. §27-35-50(4) and used annually. f. All 16th section leasehold property rights will be appraised. g. In case of ownership splits, the county will identify acreage in each major soil group as required and will estimate values annually for each accordingly. h. All new construction, additions, or expansions shall be appraised by approved MSTC methods whether or not ownership of land has changed. For the purpose of appraisal of new construction or improvements under construction, the county shall use at its discretion, in addition to physical inspection, all available information including but not limited to the following: i. Building permits issued by the county, city or town. ii. Septic tank permits issued by the Health Officer or similar official. iii. Electrical connections or services which would indicate new construction or improvements being constructed. Any records or inspection of construction in progress or completed which may be maintained by the city or county office. 7. Ratio Studies a. The following shall be the standards used for ratio studies: i. A standard (acceptable limits) for overall assessment performance, i.e., compliance with statutory assessment level. ii. A standard for uniformity and equality of overall assessments. iii. A standard for price related assessment bias. b. Each standard and its range of acceptability is explained as follows: i. Ratio: The acceptable limits around a median ratio shall not exceed 20 percent, plus or minus, on Class I property, and not exceed 25 percent, plus or minus, on Class II and III properties. Further, counties which are ordered to adjust shall meet a ratio of not more than 15 percent, plus or minus, on Class I property, and 20 percent, plus or minus, on Class II and III properties after adjustments. ii. Standard of Uniformity and Equality: It is generally recognized that the coefficient of dispersion about the median is the most accurate indicator of uniformity and equality. Therefore, the coefficient of dispersion about the median shall not exceed 25 percent for purposes of rejection, and require correction to not more than 15 percent on Class I properties, and 20 percent on Classes II and III properties. iii. Price Related Assessment Bias: A standard for regressivity based on the regressivity index shall not exceed 0.92 percent on the low end, and 1.08 percent on the high end.

35 Miss. Admin. Code Pt. 6, R. 101 (Reserved)

35 Miss. Admin. Code Pt. 6, R. 200 Rule 200

Any county whose next update year for real property as of January 1, 2007 is tax year 2007, 2008 or 2009 shall be regulated by the provisions of Title 35, Part VI, Subpart 02,

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Chapter 06, Section 100 of the Mississippi Administrative Code, including all subsections, paragraphs, subparagraphs and clauses of that section, as set above, until the year succeeding this next real property update year. For all years succeeding the next real property update year for those counties whose next update year for real property as of December 31, 2006 is tax year 2007, 2008 or 2009, the county shall be regulated by the provisions of Title 35, Part VI, Subpart 02, Chapter 06, Sections 300 through 604 of the Mississippi Administrative Code, including all subsections, paragraphs, subparagraphs and clauses of those sections, as set out below. Any county whose update year for real property is 2006 shall be regulated by the provisions of Title 35, Part VI, Subpart 02, Chapter 06, Sections 300 through 604 of the Mississippi Administrative Code, including all subsections, paragraphs, subparagraphs and clauses of those sections, as set out below, for tax year 2007 and all succeeding tax years.

35 Miss. Admin. Code Pt. 6, R. 201 (Reserved)

35 Miss. Admin. Code Pt. 6, R. 300 Rule 300

Title 35, Part VI, Subpart 02, Chapter 06 of the Mississippi Administrative Code is promulgated to establish performance standards and acceptable parameters for evaluation of the accuracy of property tax assessments and to insure equalization of property values by class throughout the State of Mississippi. The standards of performance included in this chapter will be used by the State Tax Commission in determining the acceptability of the real and personal rolls of each county.

35 Miss. Admin. Code Pt. 6, R. 301 Rule 301

For the purposes of this rule, being Title 35, Part VI, Subpart 02, Chapter 06, Sections 300 through 604 of Mississippi Administrative Code and all subsections, paragraphs, subparagraphs and clauses thereof, the following definitions shall apply: 1. 25% Personal Property List - the 25% list is an annual list compiled from the base year personal property tax roll. It is comprised of approximately 25% of the total personal property on the tax roll excluding leased property, cell towers and billboards. It is to be furnished to the property tax office by the county assessor designating the personal property parcels (businesses) which will undergo close inspections for each of the four years in the update cycle. Parcels are required to be inspected only one time during the update cycle. 2. 25% Real Property List – a list of parcels by map numbers that nearly approximates 25% of the total real property parcels in a county. Such parcels will be subject to selection for audit by the property tax office. The list is due to the property tax office by January 1 st of the audit year. The property tax office will approve the 25% real property list. 100% of all real property parcels must be closely inspected during the update cycle. 3. Additions - items of personal property added to a business since the last roll year. 4. Appraisal Manual– the current Mississippi Appraisal Manual with current revisions as produced by the property tax office. 5. Assessment equity test – the test for price related bias. Price related bias occurs when appraised values are slanted in favor of lower-priced properties or higher- priced properties. The formula for the assessment equity test is the mean divided by the weighted mean. If the resulting number is above one, regressivity is indicated. This indicates that high-value properties are under-appraised relative to low-value

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properties. If the result is below one, progressivity is indicated. Progressivity indicates that high-value properties are over-appraised relative to low-value properties. 6. Assessment Level Test – the overall ratio of appraised values to market values in a statistical study. For the purposes of this rule, the level of assessment will be measured by the median. 7. Assessment Uniformity Test – the test for fairness of individual assessments. It is measured by the coefficient of dispersion about the median. 8. Asset - any item that is used in the operation of a business. 9. Asset List – a detailed listing furnished by a business containing personal property items purchased for use in a business. The list should include description, original acquisition cost new, and the actual age of each item. 10. Base Year – the year immediately succeeding the most current update year. 11. Business – any commercial establishment, industry, or research and development facility. 12. Close Inspection of Real Property – physically inspecting real property parcels for property tax purposes by viewing them closely with property record card in hand. 13. Coefficient of Dispersion About the Median – a numerical value that measures the average percentage deviation of the ratios from the median in a statistical study. 14. Commission - the State Tax Commission, the Chairman and Associate Commissioners. 15. Consigned Items – items delivered or transferred to the control of another's care in anticipation of sale. 16. County Audit – the verification process performed by the property tax office to determine whether counties have equalized values within given classes of property and have complied with the provisions of this rule to insure that values have been equalized. 17. County Building Index – a calculated number used to adjust the costs in the appraisal manual to meet local construction costs, including, but not limited to, labor, materials and profit. Such index is applied to real property improvements as provided in the appraisal manual. 18. Deed Log – a record of all deeds filed in the Chancery Clerk’s office during a calendar year. It must contain all data required by the appraisal manual. 19. Deletions – items of personal property removed from a business during the prior roll year. 20. Depreciation – the loss in value of any item. 21. Drive-by Inspection – the process of reviewing parcels from a motor vehicle to determine whether changes have occurred to the parcels. Drive-bys are an acceptable means of performing real property maintenance. 22. Error Points – points used in the determination of passing or failing the county audit. They are assigned to a category based upon the seriousness of the error with category I errors being the most serious and category III being the least serious. 23. Itemized Listing – an asset list or a detailed listing produced by a contractor acting on behalf of a county, or by a county appraiser. 24. Inventory – an itemized list of goods on hand and available for sale by a business. It may include, but is not limited to; products held in reserve or put on shelves for

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sale, resale or consumption by the public. They may be raw materials, work in progress, finished goods, consigned goods, or ingredients used in food preparation. 25. Leased Equipment – personal property items furnished by another business which are used under terms of a contact or agreement. 26. Mapping Reconciliation – a verification accounting of parcels on the maps within a county to insure that they are accounted for on the land roll. 27. Median – the midpoint or middle value when a set of values is ranked in order of magnitude. 28. Order – A document issued by the Commission which identifies the assessment levels of a class or classes of property and whether the county is in compliance with the regulations of the commission. It further identifies any corrective actions necessary for counties that are not in compliance. 29. Personal Property Close Inspection - an on-site physical examination of the personal property items associated with a business. The examination is performed with property record card in hand by a contractor acting on behalf of a county or by a county appraiser. 30. Property Record Card – a permanent card or computer generated facsimile of a card containing information about the parcel that it represents. Information on the card shall adhere to the requirements of the appraisal manual. 31. Property Tax Office – the Property Tax Office of the Mississippi State Tax Commission or the employees of same. 32. Real Property Maintenance – the annual process of adding new properties to the tax roll, adding additions to existing properties on the tax roll, and deleting structures from the tax roll which have been removed from existing parcels. 33. Rendition - the actual listing of personal property completed by the taxpayer or other preparer, signed by the taxpayer, and returned to the tax assessor’s office. A summary of the taxpayer’s property with individual additions and deletions noted is likewise considered a rendition, providing the assessor has a complete detail listing of the taxpayer’s personal property signed by the taxpayer. 34. State Index – The state index is a calculated number which represents a multiplier used to bring costs in the appraisal manual to the actual cost of constructing an improvement. The state index will not be calculated from construction occurring in counties having a population exceeding 40,000 according to the 2000 U.S. census. 35. Trending Factors or Multipliers – tables provided by the property tax office annually that adjust for inflation in industries. 36. Update – the process that each county must complete every four years in which every parcel is closely inspected to determine whether changes have occurred. All parcels must be revalued during the update cycle. 37. Update Year – the last year of the county's four-year cycle, or the year approved by the property tax office as the update year. 38. Update Cycle – the update cycle is the four year period commencing with the base year and ending with the update year. The update cycle may vary from four years only with the approval of the property tax office.

35 Miss. Admin. Code Pt. 6, R. 302 (Reserved)

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35 Miss. Admin. Code Pt. 6, R. 400 Real Property Update Process:

35 Miss. Admin. Code Pt. 6, R. 400.01 Rule 400.01

Every county is required to update parcel values a minimum of once every four years. To achieve such update, each county must have its values in accord with the values produced by applying the procedures in the then current version of the appraisal manual, and insure that the property values fall within established tolerances of market value. Counties will closely inspect approximately 25 percent (25%) of total real property parcels each year unless a county has written approval from the property tax office to do otherwise. Where it is impractical to closely view a given parcel, the county appraiser should indicate on the property record card why the parcel was not closely inspected. An error will not be noted when the county appraiser fails to closely view the parcel because of taxpayer objections, dangerous animals, high fences or other legitimate obstacles unless the changes to the parcel can be observed from the front of the structure.

35 Miss. Admin. Code Pt. 6, R. 400.02 Rule 400.02

At the end of the update cycle, the county must have equalized values within the county so that similar properties have been assigned similar values, and that the relationships among all property values are correct. Counties must have completed an index study as provided in the appraisal manual and submitted it to the property tax office by April 1 of the update year providing adequate sales exist. If the study indicates a new index is justified, it must be implemented during the update year. If any county does not have adequate sales to complete the index study, the county must implement the state index. Property values on the tax roll must reflect the updated values shown on the property record cards. Additionally, counties must complete sales ratio studies, and the ratios must fall within accepted parameters as shown elsewhere in this rule. Counties must also physically observe all parcels on the 25 percent (including all real property which is required to be on the roll as of January 1 st ) list to insure correct depreciation, and such observed depreciation must be used on structures with an age of twenty (20) years or more. The tax roll must include all real property which is required to be on the roll as of January 1 st .

35 Miss. Admin. Code Pt. 6, R. 401 Rule 401

Guidelines for appraising differing types of property for the purpose of updating values are as follows: 1. Land – All land must be valued using the procedures set forth in the appraisal manual. 2. Agricultural Use Land - Land deemed to be used for agricultural purposes shall be classified by soil type and use (cultivatable or un-cultivatable). It shall be valued annually using the then current agricultural use values provided by the property tax office. 3. Small Tracts and Urban Land - Small tract land and urban land must be revalued during the update year if warranted. Counties must monitor sales activities, creating schedules to determine values. Counties having insufficient sales of raw land may use sales of improved parcels abstracting the improvement value. 4. Improvements - Improvements shall be valued according to procedures set forth in the appraisal manual. The county index shall be applied to improvements as required by the appraisal manual. All improvements to parcels or removal of structures from parcels shall be recorded correctly on the property record card. The

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value of such parcels must be changed on the tax roll where appropriate. 5. Real Property Maintenance - Counties are required to annually locate, list and value all new properties including additions to existing properties. Likewise, all properties which have been altered or removed shall have such changes noted on the property record cards and the values adjusted accordingly. All new properties must be measured on site. Changes to parcels shall be noted on the property record card and reflected on the land roll values. While parcels subject to maintenance only are not on the 25 percent (25%) list, and will not be audited as such, errors resulting from failure to value new improvements larger than 600 square feet will be counted as errors when found. The property tax office will verify that new houses, buildings and other large improvements have been added to the roll.

35 Miss. Admin. Code Pt. 6, R. 402 Real Property County Audits Performed by the Property Tax Office

35 Miss. Admin. Code Pt. 6, R. 402.01 Rule 402.01

The property tax office shall use sales ratio studies and other means to determine whether the counties are in compliance with this rule. During the county audit, the property tax office will review at least two hundred fifty (250) closely inspected real property parcels with improvements or 15 percent (15%) of the improved parcels on the 25 percent (25%) list, whichever is fewer. Additional parcels will be inspected if deemed appropriate by the property tax office. No more than ten percent (10%) or 25 parcels with mobile homes will be considered as part of the real property audit. Upon completion of the audit and prior to finalization, a listing of any errors, as denoted below, will be given to the tax assessor for review. The property tax office will consider any objections of the tax assessor. If after meeting with the property tax office, agreement is not reached, the board of supervisors may petition the commission for a hearing on the matter. Counties that fail audits will face sanctions as provided by Mississippi statutes.

35 Miss. Admin. Code Pt. 6, R. 402.02 Rule 402.02

Counties will be deemed to have failed the county audit and/or the update if: 1. The county does not pass the assessment level test; 2. The county does not pass the assessment uniformity test; 3. The county does not pass the assessment equity test; 4. The county audit performed by the property tax office indicates errors that exceed twenty-five (25) points; provided however, if on parcels with errors, the calculation of value by the county does not exceed 15 percent (15%) from the value calculated by the property tax office, the county will be deemed to have passed the audit irrespective of the number of error points; 5. The county does not value agricultural lands using the current rates provided by the property tax office; 6. The county does not provide the real property 25 percent (25%) list by the first Monday in July or extension due date: or 7. The county does not complete an index study and submit it to the property tax office by the First Monday in July or the extension due date, if applicable, of the update year.

35 Miss. Admin. Code Pt. 6, R. 403 Ratio Studies

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35 Miss. Admin. Code Pt. 6, R. 403.01 Rule 403.01

The property tax office shall either, perform ratio studies during the update year on county sales, or use the county ratio studies to determine whether the county has equaled or exceeded the standards for the assessment level test, the assessment uniformity test, and the assessment equity test. The studies will be performed as provided in the appraisal manual.

35 Miss. Admin. Code Pt. 6, R. 403.02 Rule 403.02

The standard for passing the assessment level test for Class I properties is a median ratio of 85 percent (85%) to 115 percent (115%) of market value. A median for Class II properties of 75 percent (75%) to 125 percent (125%) of market value is deemed passing.

35 Miss. Admin. Code Pt. 6, R. 403.03 Rule 403.03

The standard for passing the assessment uniformity test is a coefficient of dispersion about the median of 20 percent (20%) or less.

35 Miss. Admin. Code Pt. 6, R. 403.04 Rule 403.04

The standard for passing the price related bias test is an index range of .92 to 1.08.

35 Miss. Admin. Code Pt. 6, R. 403.05 Rule 403.05

Counties not meeting or exceeding the standards shown above will be deemed to have failed the tests.

35 Miss. Admin. Code Pt. 6, R. 404 Real Property Audit Errors

35 Miss. Admin. Code Pt. 6, R. 404.01 Rule 404.01

Category I errors include: 1. Failure to assess or delete major improvements, such as, but not limited to, residences or other buildings larger than 600 square feet in size and which have an improvement true value greater than $50,000. 2. Incorrect construction units totaling 25 units or greater on one building. Additional special use units will not be considered an error if their use is pre-approved by the property tax office. 3. Data entry errors which are greater than $50,000 in true value. 4. Failure during the update year to perform sales ratio studies as provided in the appraisal manual, providing that twelve or more arm’s length sales occurred during the previous two year period. 5. Failure to maintain an adequate sales file as set forth in the appraisal manual 6. Failure to implement a building index during the update cycle within a 10 percent (10%) variance of the state index as calculated by the property tax office, unless otherwise approved in writing by the property tax office. 7. Failure to provide the real property 25 percent (25%) list to the property tax office by April 1 st of the base year. 8Failure during the update cycle to update all land values, using urban land pricing and small tract schedules. 9. The above mentioned errors 4-8 are not parcel specific, thus, they will be assigned 4 error points each.

35 Miss. Admin. Code Pt. 6, R. 404.02 Rule 404.02

Category II errors include: 1. Failure to assess or delete garages totaling 400 square feet or larger, and/or upper floors and rooms in residences or other buildings with true values ranging from $5,000 to $50,000.

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Failure to assess or delete utility buildings or other detached buildings larger than 400 square feet in size, excluding prefabricated type buildings. 3. Failure to measure any dimension of an improvement within 2 feet. 4. Failure to classify any building within one full class (building classification as set forth in the appraisal manual). An incorrect classification of one full class or more is considered an error. 5. Decimal areas as set forth in the appraisal manual which are incorrect by .5 or greater. 6. Failure to list depreciation of a given improvement within 10 percent (10%) of the depreciation for the actual or effective age as shown in the appraisal manual. Improvements where the county appraiser has noted observed depreciation will not be considered an error unless the observed depreciation has a variance within 20 percent (20%) of actual depreciation. Observed condition shall be used to depreciate buildings with an effective age twenty (20) years and older. 7. Failure to use the correct base rate table (high or low table) when valuing improvements. 8. Incorrect construction units totaling six (6) to twenty-four (24) units on one building. 9. Failure to correctly assess garages or other non-living areas that have been changed to base area. 10. Failure to remove improvements that no longer exist and that were on the land roll with values of $5,000 or more. 11. Failure to correctly calculate the base and/or adjusted areas of a structure. 12. Data entry errors which fall within a range of $5,001 to $50,000 in true value. 13. Failure to correctly value land within a tolerance of 20 percent (20%) of market value unless documented on the property record card 14. Failure to correctly assess any improvement or extra features, not otherwise listed in the error portion of this rule, for which costs or costs schedules exist in the appraisal manual, providing that the cost of the individual improvement or feature exceeds $5,000.

35 Miss. Admin. Code Pt. 6, R. 404.03 Rule 404.03

Category III errors include: 1. Failure to correctly assess wood decks, patios, prefabricated utility buildings and all other attached or detached buildings not included under Category I or II above. 2. Incorrect construction units totaling 2-5 units or less on an individual building. 3. Decimal areas as set forth in the appraisal manual which are incorrect within a range of .2 to .5. 4. Data entry errors which fall within a range of $1,000 to $5,000 in true value. 5. Failure to assess additions to improvements, including, but not limited to rooms and/or garages, totaling 400 square feet or less. 6. Failure to correctly assess any improvement or extra features, not otherwise listed in the error portion of this rule, for which costs or costs schedules exist in the appraisal manual, providing that the cost of the individual improvement or feature is $5,000 or less.

35 Miss. Admin. Code Pt. 6, R. 404.04 Standards for Real Property Audits

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Category I: Each 1 percent (1%) of audited parcels with category I errors yields 10 error points. 2. Non-Parcel specific category I errors yield four error points each. 3. Category II: Each 1% of audited parcels with category II errors yields 2 error points 4. Category III: Each 1% of audited parcels with category III errors yields .5 error points 5. Example: 250 parcels audited 2 parcels with category I errors = 8.0 error points 6 parcels with category II errors = 4.8 error points 10 parcels with category III errors = 2.0 error points Total Error Points 14.8 County passes audit 6. Implementation: Counties shall fall under the provisions of this rule commencing with their next base year after December 31, 2006.

35 Miss. Admin. Code Pt. 6, R. 405 (Reserved)

35 Miss. Admin. Code Pt. 6, R. 500 Personal Property

35 Miss. Admin. Code Pt. 6, R. 501 Update Process

35 Miss. Admin. Code Pt. 6, R. 501.01 Rule 501.01

The County shall annually comply with the provisions of Title 35, Part VI, Subpart 02, Chapter 08 of the Mississippi Administrative Code.

35 Miss. Admin. Code Pt. 6, R. 501.02 Rule 501.02

All Counties will develop and use an update cycle of four (4) years. The base year will be the year immediately succeeding the real property update year. This process will result in the physical reviewing of 100 percent (100%) of all personal property accounts every four years. Each county is required to perform a close inspection and re-value approximately percent (25%) of all personal property parcels annually. In each subsequent year, an additional 25 percent (25%) of personal property parcels shall be physically reviewed and re-valued. The base year will be used to determine the minimum number of parcels that must be physically reviewed and verified each year during the update cycle. During the base year, the county must supply a list of the parcels to be closely inspected and re-valued during each of the four (4) years of the cycle. Counties should complete all the appraisals annually by June 30 or extension due date. Failure to provide the 25 percent (25%) personal property list by the first Monday in July or extension due date will constitute automatic failure of the audit. Any county failing to list 80 percent (80%) of all items found on the parcels reviewed in the random sample, will constitute failure of the personal property portion of the audit.

35 Miss. Admin. Code Pt. 6, R. 502 Maintenance

35 Miss. Admin. Code Pt. 6, R. 502.01 Rule 502.01

Counties must be in compliance with all provisions of Title 35, Part VI, Subpart 02, Chapter 08 of the Mississippi Administrative Code.

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35 Miss. Admin. Code Pt. 6, R. 502.02 Rule 502.02

Inventory - All inventories shall be valued annually. The true value of current inventory will be appraised as of January 1st or an average of inventory of the previous twelve (12) months. 502.03 Leased property - Leased property shall be valued annually. The business where the leased property is physically located shall identify said property on its Personal Property Rendition Form. However, the property shall be assessed to the lessor. The lessor shall actually render the property. The assessor shall have a master property record card which shall locate and identify all leased property of the lessor. In the event the lessee does not adequately identify the lessor, the lessee will be taxed on the leased property.

35 Miss. Admin. Code Pt. 6, R. 502.04 Rule 502.04

All new businesses, additions, and deletions shall be captured annually and the values reflected on the tax roll.

35 Miss. Admin. Code Pt. 6, R. 502.05 Rule 502.05

It is the responsibility of the county to use the most recent schedules for depreciation and trending factors (multipliers) supplied by the property tax office.

35 Miss. Admin. Code Pt. 6, R. 502.06 Rule 502.06

Prior to the first Monday in July or extension due date, the assessor must produce a list of all new parcels added during the prior roll year.

35 Miss. Admin. Code Pt. 6, R. 502.07 Rule 502.07

The original rendition for each personal property parcel must be available to the property tax office upon request.

35 Miss. Admin. Code Pt. 6, R. 502.08 Rule 502.08

The property tax office will do sample verification to determine if mobile homes are on the tax roll and are valued according to the property tax office guidelines.

35 Miss. Admin. Code Pt. 6, R. 503 Personal Property Audits

35 Miss. Admin. Code Pt. 6, R. 503.01 Rule 503.01

Personal property audits will be conducted on an annual basis. The audit will consist of, but not be limited to, a minimum of thirty (30) randomly selected parcels or the total number of parcels on the 25 percent (25%) list whichever is less. The total number of mobile homes considered as part of the personal property audit will be a maximum of 10 percent (10%) of the randomly selected parcels. The property tax office reserves the right to look at any and all information relating to personal property during the audit process. The final audit findings will be reported using the error classifications listed below. Multiple instances of the same error within a parcel will be counted only once. The most serious error in each parcel will be counted.

35 Miss. Admin. Code Pt. 6, R. 503.02 Rule 503.02

Counties will be deemed to have failed the county personal property audit and/or the update if: 1. Failure to provide the 25 percent (25%) list by the first Monday in July or as required by the roll extension due date. 2. Failure to physically review and value at least 80 percent (80%) of the total true value of the personal property belonging to the businesses on the random sample; 3. The county audit performed by the property tax office indicates errors that exceed twenty five (25) points

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35 Miss. Admin. Code Pt. 6, R. 504 Personal Property Audit Errors

35 Miss. Admin. Code Pt. 6, R. 504.01 Rule 504.01

Category I 1. Failure to assess or delete a new business whose true value equals or exceeds $50,000. 2. Failure to list or assess individual items of any business whose true value equals or exceeds $20,000. 3. Data entry errors that equal or exceed $25,000 true value per parcel. 4. Failure to assess a 10 percent (10%) penalty to any business that fails to file a proper rendition. 5. Failure to list items in a business totaling 30 percent (30%) or more of true value providing the business’ true value equals or exceeds $50,000. 6. Failure to value a taxable inventory equal to or exceeding $100,000 of true value. 7. Failure to physically review and re-value the assets of a business on the 25 percent (25%) list. 8. Failure to provide the personal property 25 percent (25%) list to the property tax office by April 1st of the base year. 9. Failure to routinely use the most current depreciation tables or multiplier tables supplied by the property tax office. 10. Failure to routinely assess 10 percent (10%) penalty for renditions filed after April 1. 11. Failure to submit renditions or copies of renditions to the property tax office upon written request. 12. Failure to use the current pricing information supplied by the property tax office for other approved pricing. 13. The above mentioned category I errors 8-12 are not parcel specific, thus, they will be assigned 4 error points each.

35 Miss. Admin. Code Pt. 6, R. 504.02 Rule 504.02

Category II 1. Data entry errors between $5,000 and $25,000 of true value per parcel. 2. Failure to compare renditions to the property record cards and make needed adjustments. 3. Failure to value a taxable inventory which equals or exceeds $4,000 but is less than $100,000 of true value. 4. Failure to list items in a business totaling 30 percent (30%) of actual true value where the true value of the business ranges from $25,000 to $50,000.

35 Miss. Admin. Code Pt. 6, R. 504.03 Rule 504.03

Category III 1. Failure to list items in a business totaling 30% of true value in any given business providing the value of the business ranges from $4,000 to $25,000 of true value. 2. Data entry errors relating to a particular parcel between $1,000 and $5,000 of true value. 3. Failure to value a taxable inventory having a true value of less than $4000. 4. Failure to note the appraiser’s initials and dates of each inspection on the property record card or enter such data into the computer system.

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Appraising individual pieces of furniture and/or fixtures using an arbitrary value, rather than using the appraisal manual or other acceptable pricing method. 6. Failure to properly assess the 10 percent (10%) penalty relating to individual renditions. 7. Failure to assess a mobile home.

35 Miss. Admin. Code Pt. 6, R. 504.04 Rule 504.04

Personal Property Audit Standards 1. Category I: Each 1 percent (1%) of audited parcels with category I errors yields error point 2. Category II: Each 1 percent (1%) of audited parcels with category II errors yields error points 3. Category III: Each 1 percent (1%) of audited parcels with category III errors yields 25 error points 4. Non-Parcel specific category I errors yield 4 error points each.

35 Miss. Admin. Code Pt. 6, R. 505 (Reserved)

35 Miss. Admin. Code Pt. 6, R. 600 Mapping Requirements

35 Miss. Admin. Code Pt. 6, R. 601 Rule 601

Minimum Requirements for Aerial Photography 1. Aerial photography covering the entire county will be flown periodically and accepted by the county using the minimum scale requirements shown below. The time interval for flying aerial photography will be determined on a parcel count basis as follows: Parcels of real property Time period 10,000 parcels and less Within 15 years 10,001 to 20,000 parcels Within 12 years 20,001 parcels and above Within 10 years 30,001 and above Within 8 years ------------------------------------------------------ The county may appeal to the property tax office for an extension of the time period based on the lack of growth in assessed value, the lack of growth in number of parcels, the lack of change in agricultural use coverage or in the case of natural disaster. Requests for such extensions must be made one (1) year prior to the set time period intervals as described above. The property tax office shall accept or reject in writing the request within ninety (90) calendar days. If the Mississippi Remote Sensing /Geographic Information Systems Coordinating Council furnishes free aerial photography, all digital counties must use such new photography unless prior photography plans have been approved. All photography must meet property tax office standards. 2. Within two (2) years after acceptance of aerial photography, the county will re- classify or verify all agricultural property according to its current use (cultivatable or uncultivatable). Counties shall use the most recent soil survey available. Counties flying multiple times within the designated time frame may request that additional verification of cultivatable or uncultivatable lands not be required. 3. Prior to flying new aerial photography the county will contact the property tax

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office in writing. If the original ownership base mapping has been approved by the property tax office, minimum photography accuracy will be considered by the property tax office. Written approval from the property tax office must be submitted to the county within ninety (90) calendar days after the county notifies the property tax office of its intent to fly new aerial photography. 4. Photography will be flown at such times as deciduous trees are free from foliage, vegetation is minimal, and the rivers, streams and lakes are within the normal boundaries. No vertical photographs will be made when the sun is more than thirty degrees from vertical. 5. Minimum scale requirements: Negative scale for all rural areas shall be one inch equals two thousand feet (1 "=2000') flown from an altitude of 12,000 feet; all designated urban areas shall be one inch equals five hundred feet (1"=500’) flown at an altitude of 3000 feet. Any areas requiring enlargements to one inch equals two hundred feet (1"=200') shall be enlarged from the one inch equals two thousand feet (1 "=2000') negative. If using the orthophoto approach, the minimum resolution accepted will be 0.5’ pixels for 1=100’ areas and 2.0’ pixels for 1=400’ areas. Alternate scales may be approved with property tax office approval. All scale requirements must be coordinated with the property tax office prior to flying aerial photography.

35 Miss. Admin. Code Pt. 6, R. 602 Rule 602

Minimum Requirements for Mapping There will not be an update cycle for mapping. This rule contains time frames for performing the functions necessary for mapping. 1. Counties shall acquire and maintain a proper ownership mapping system using an appropriate aerial photography base. Ownership maps and aerial photos will be maintained as separate products but will be required to overlay and correlate. Once aerial photography is flown and accepted, the county must submit a plan acceptable to the property tax office to complete ownership map revisions. The plan must include who will perform the mapping, time requirements, and detail work to be performed. 2. Originals or copies of current ownership maps and aerial photography must be housed in the Assessor’s office. 3. Upon flying new photography, the accepted map scales for ownership mapping are as follows: Minimum scales required Scale Application 1”=100’.......Urban centers/ heavily parceled incorporated areas 1”=400’.......Sparse/Moderate rural areas Alternate scales accepted 1”=50’ Downtown business districts 1”=200’...... Populated rural/suburban areas 4. Mapping maintenance is to be performed in a timely manner on an annual basis. Maintenance shall include working all recorded vesting instruments including but not limited to: a. Changing all names/addresses b. Creating new parcel splits

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c. Updating parent parcels d. Soil/productivity calculations e. Correcting of identified errors in existing maps f. Final inking (manual counties) 5. The following documents should be considered when making mapping changes: a. Wills involving real estate b. Plats of new subdivisions c. Mississippi Department of Transportation documents indicating new and/or widened road right of way as well as easements d. Municipal documents indicating corporate limit annexations e. Government documents indicating new district boundaries 6. All parcels with agricultural use acreage changes shall be recalculated annually to reflect the correct acreages based on the soil productivity and current lad use. The most recent published soil survey shall be utilized. 7. All deed changes affecting the roll will be completed on or before June 30. Any changes to be completed after the first Monday in July or roll extension due date must be approved in writing by the property tax office. 8. A deed log containing a record of all mapping changes shall be maintained. The minimum contents of the log shall be parcel number, deed book/page, instrument date, grantor, grantee, and type of change (name change, new parcel, type of reference). The deed log shall be submitted to the property tax office in hard copy, CD or by e-mail on or before June 30 each year. Failure to submit a deed log will result in failure of the mapping audit. The deed log for the tax year 2010 and after must be received on CD or by e-mail. The hard copy version of the deed log will no longer be accepted after 2010. Excel is the preferred format for the deed log. 9. All parcels on the land roll will be reconciled against the parcels on maps to ensure that all parcels are on the land roll. Counties with manually-drafted maps shall perform this reconciliation, at a minimum, every four (4) years to coincide with the appraisal update year. Counties with digital maps shall reconcile annually. Failure to perform the reconciliation will result in failure of the mapping audit. 10. Assessors shall have the capability to produce or reproduce within 10 working days for the property tax office all documents, maps, photographs, copies, aerial photo or imagery composites, and materials described in these minimum requirements at the prescribed sizes, scales, and formats, and on the prescribed mediums (paper, mylar, etc.). 11. Only references to real property parcels shall be placed on the maps and carried to the land roll. References to non-parcels such as road right-of-way, railroad right- of-way, dummy numbers for entire subdivisions and whole sections may be used, at the assessor’s discretion, on the maps and land roll. All parcels on the land roll shall be designated as such on the ownership maps including homestead splits and “improvement only” parcels. Any parcels not appearing on the ownership maps must be documented by the assessor’s office. Dimension or acreage information must appear on the ownership maps or be available through other means. 12. All counties must have a set of maps or computerized format of same stored off- site.

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35 Miss. Admin. Code Pt. 6, R. 603 Rule 603

Mapping Audit Process The mapping audit will consist of, but not be limited to, a minimum of twenty (20) new parcel splits selected from the deed log or the total number of parcels on the deed log whichever is less. When available, some deeds will be selected from each month of the deed log. The mapping audit will include rural as well urban properties. The property tax office reserves the right to look at any and all information relating to mapping during the audit process.

35 Miss. Admin. Code Pt. 6, R. 604 Rule 604

Mapping Audit Errors The final audit findings will be reported using the error classifications listed below. Parcels containing multiple instances of the same error will be counted as 1 error. The most serious error on each parcel will be counted. Errors will generate points based on the following schedule:

35 Miss. Admin. Code Pt. 6, R. 604.01 Rule 604.01

Category I 1. Parcel is not mapped 2. Parcel is mapped but not on land roll 3. Failure to deliver the deed log by June 30 4. The above category I error 3 is not parcel specific, thus, it will be assigned 4 error points.

35 Miss. Admin. Code Pt. 6, R. 604.02 Rule 604.02

Category II 1. Soils are not recalculated correctly 2. The parcel is mapped in the wrong location 3. Incorrect soil class applied to a given parcel

35 Miss. Admin. Code Pt. 6, R. 604.03 Rule 604.03

Category III 1. Lines scale is outside the tolerance of 10 percent (10%) 2. A parcel is mapped but not inked 3. Acreage computed is outside the tolerance of 10 percent (10%) 4. Dimension is missing, incorrect, or outside the 10 percent (10%) tolerance

35 Miss. Admin. Code Pt. 6, R. 604.04 Rule 604.04

Mapping Audit Standards 1. Category I: Each 1 percent (1%) of audited parcels with category I errors yields 2 error points 2. Category II: Each 1 percent (1%) of audited parcels with category II errors yields 1 error point 3. Category III: Each 1 percent (1%) of audited parcels with category III errors yields .5 error points 4. Non-Parcel specific category I errors yield 4 error points each. 5. The mapping audit shall he deemed as failed under any one of the following criteria: a. Failure to perform the required reconciliation. b. Failure to contact property tax office prior to conversion to digital mapping. c. Failure to properly apply agricultural use classes on a county wide basis. d. Failure to fly according to the prescribed schedule unless an extension is

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granted. e. Failure to supply the deed log by July 1 or extension due date. f. The error point total exceeds 25.

35 Miss. Admin. Code Pt. 6, R. 605 (Reserved)

35.VI.2.06 updated effective January 1, 2007

Chapter 07 Centrally Assessed Property

35 Miss. Admin. Code Pt. 6, R. 100 Rule 100

Mississippi property in use, and valued and assessed by the Department under Miss. Code Ann. Section 27-35-301, shall not depreciate in value below a floor of twenty percent (20%) of original or gross investment. Property abandoned or out of use, shall not depreciate below a floor of ten percent (10%) of original or gross investment.

35 Miss. Admin. Code Pt. 6, R. 101 Rule 101

When the property of a telecommunication, electric or gas distribution company required to be valued and assessed by the Department is located in more than one state, the value shall be allocated to the State of Mississippi based upon the original cost of the company’s operating property.

35 Miss. Admin. Code Pt. 6, R. 102 Rule 102

When the property of a pipeline company required to be valued and assessed by the Department is located in more than one state, the value shall be allocated to the State of Mississippi based upon the original and depreciated cost of the company’s operating property.

35 Miss. Admin. Code Pt. 6, R. 103 Rule 103

When the property of a railroad company required to be valued and assessed by the Department is located in more than one state, the value shall be allocated to the State of Mississippi based upon the original cost of the company’s operating property, track miles, operating revenue, operating miles, and terminal activity.

35 Miss. Admin. Code Pt. 6, R. 104 (Reserved)

35.VI.2.07 revised effective January 1, 2019.

Chapter 08 Appraisal of Personal Property

35 Miss. Admin. Code Pt. 6, R. 100 Rule 100

All personal property is required to be annually appraised at true value. This rule establishes a uniform method by which all personal property shall be appraised.

35 Miss. Admin. Code Pt. 6, R. 101 Rule 101

Personal Property Listing: 1. All taxpayers are required to supply to the Tax Assessor on or before the first day of April in each year a true listing of their personal property. This is to be accomplished by providing an asset listing and each year submitting a Personal Property Rendition Form, which should bring the asset listing up-to-date. 2. If any person shall fail to list for assessment, as required by law, any personal property which is taxable under the laws of the State of Mississippi, or shall

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intentionally fail to provide the Tax Assessor with any documentation that the Tax Assessor considers necessary to verify the list, the current year assessment shall be increased by ten percent (10%). 102 Rebuilding or Refurbishment: The value of the investment in upgrading or updating equipment shall be captured. This value should be captured for the year of the investment as if the new investment represented a new, or separate, piece of equipment and should be factored and depreciated accordingly. The investment should be associated with the appropriate asset on the taxpayer's asset list. At the time the base (original) equipment is removed from the facility and thus the property roll, the appropriate proportion of the investment should be withdrawn from the dollar entry on the property roll.

35 Miss. Admin. Code Pt. 6, R. 103 Rule 103

Depreciation Schedule: 1. The State Tax Commission (STC) will annually supply the appropriate depreciation schedules. The schedule to be applied to a particular industry will be determined by the average class life for that industry as established by Marshall Valuation Service's Life Expectancy Guidelines. This guideline is based on IRS publication number 946 which sets forth economic class lives. The depreciation table bottoms at a twenty percent (20%) good for operating equipment. Salvage value will apply only to equipment, which is not usable. If equipment is operational, it will not be considered salvage. 2. Depreciation on watercraft of every kind and character used in connection with gaming operations that have permanent connections to shore side facilities will be determined by the Mississippi State Tax Commission guidelines (Class Lives of Industries) and published annually.

35 Miss. Admin. Code Pt. 6, R. 104 Rule 104

Method of Pricing: 1. Industry: Original acquisition cost new, including all cost associated with installing the equipment in place for production, will be the base for all industrial property. The industry will be classed by utilizing Marshall Valuation Service's manual showing the average life category for the industry. The base cost will be multiplied by the appropriate inflation factor furnished by the STC (from Marshall Valuation Service) based on the age of the item. This calculation will be multiplied by the appropriate percent good depreciation factor (again based on age) that is provided annually by the STC. 2. Business: a. The STC pricing guide will be used as a source of pricing business personal property. Since the STC is factoring or revising the prices on all items each year, prices used from this source will not be factored for inflation by the Assessor. Prices from the STC manual should be multiplied by the appropriate percent good factor (depreciation schedule) supplied by the STC according to age. Any deviations from the STC pricing guide must be documented in the Assessor's file. Invoices showing prices in arms length transactions, which reflect market value, will be acceptable provided all costs associated with installation of the equipment are included. (Renditions alone will not be acceptable). In the event the invoices do not reflect a market value,

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then the Assessor should use the pricing guide or other documentation, which clearly establishes the true value of the property in question. This will usually be encountered when the property is purchased at a liquidation sale or other type of forced sale where the property is sold for less than its true value. b. Any prices that deviate from the STC manual must be classified using the middle value of the asset range life in years of the Marshall Valuation Service's Life Expectancy Guidelines (from IRS Publication 946). Values must be multiplied by the appropriate inflation factor furnished by the STC (based on Marshall Valuation Service) and then multiplied by the STC percent good tables provided by the STC. c. Documentation for items priced outside the manual and items not und in the manual shall be forwarded to the STC. The missing item(s) will be priced by the STC within ten (10) days from the date of receipt of the written request from the county with sufficient information to identify and value the item(s). In the event the county does not receive the appropriate price within the ten (10) day period, then the Assessor should use comparables or the best information available in arriving at the true value.

35 Miss. Admin. Code Pt. 6, R. 106 Rule 106

Obsolescence: 1. Functional Obsolescence: The Assessor may optionally grant an allowance for functional obsolescence. If the Assessor chooses to grant such an allowance in addition to that already contained within the normal depreciation tables, it must remain within the allowance contemplated in the functional obsolescence tables annually furnished by the STC. Only in the most extreme circumstances would an allowance beyond that contemplated in the tables of allowance be allowed. Allowance for functional obsolescence beyond the amount provided in the tables must be elaborately justified by the taxpayer and scrutinized by the Assessor and STC. 2. Economic Obsolescence: Economic obsolescence must be proved on a case-by- case basis to the Tax Assessor.

35 Miss. Admin. Code Pt. 6, R. 107 Rule 107

If the observed conditions or supporting documentation or other information regarding the property point to an effective age greater than or less than the actual age, the observed condition or evidence takes precedence over the table of depreciation.

35 Miss. Admin. Code Pt. 6, R. 108 (Reserved)

Subpart 03 Homestead Exemption

Chapter 01 Exemptions and Reimbursements

35 Miss. Admin. Code Pt. 6, R. 100 Rule 100

The Tax Commission performs two functions in reference to homestead exemption. The first function is to determine the eligibility of taxpayers who wish to obtain an exemption from ad valorem property taxes. The second function is to reimburse the taxing unit who suffers a tax loss because of its exemption.

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35 Miss. Admin. Code Pt. 6, R. 101 Rule 101

EXEMPTIONS Homestead Exemption is a privilege offered to eligible taxpayers by the State of Mississippi. The exemption is not granted automatically. An application must be filed and each taxpayer must qualify for the exemption. There are two types of exemptions regular and additional. 1. Regular The regular exemption is given to all eligible taxpayers. The exemption is from all ad valorem taxes assessed to property, limited to the first seven thousand five hundred dollars ($7,500) of assessed value, and limited to three hundred dollars ($300) of actual exempted tax dollars. Any ad valorem taxes imposed on the assessed value of property over the first seven thousand five hundred dollars ($7,500) must be paid. Assessed value is determined by the tax assessor of the county in which property is located. Homestead property is usually classified as Class 1 property with a 10% assessment rate; however, if any income producing activity is located on the property, it may be classified as Class 2 with a 15% assessment rate. Class 1 property is not necessarily homestead property. 2. Additional Any taxpayer that qualifies for the additional exemption has an even greater exemption offered to them. The requirements for the additional exemption are detailed in Rule 3 - Applicant. The exemption is from all ad valorem taxes assessed to property, limited to the first seven thousand five hundred dollars ($7,500) of assessed value. No dollar limit is placed on the actual exempted tax dollars. Any ad valorem taxes imposed on the assessed value of property over the first seven thousand five hundred dollars ($7,500) must be paid.

35 Miss. Admin. Code Pt. 6, R. 102 Rule 102

REIMBURSEMENT The Tax Commission reimburses the taxing unit for each eligible and allowed taxpayer. The counties and the separate school districts are reimbursed for the regular exemptions. The municipalities are reimbursed for the additional exemptions. 1. Requirements In order for a taxing unit to receive reimbursement for any tax loss suffered due to an allowed homestead exemption, a request must be made to the homestead exemption office. a. County For a county, the request consists of the ORIGINAL copies of the Certificate of Tax loss, the Recapitulation of Homestead Exemptions (Supplemental Roll), Affidavit of Rolls, and the homestead exemption applications. b. Municipality For a municipality, this request consists of the ORIGINAL copies of the Certificate of Tax Loss, a Municipal Recapitulation of Homestead Exemptions (Municipal Supplemental Roll), Affidavit of Municipal Rolls, and the Certified Tax Levy. 2. When The reimbursement is made in two payments during the year. The first payment is made March 1 and is approximately one half (1/2) of the total amount to be reimbursed. The second payment is made September 1 and is the remainder of the

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total amount due. If a school taxing unit is in need of the second payment before the school year begins, a Certificate of Necessity, Form 72-035, is submitted to the Tax Commission and the second payment will be made June 1. Reimbursement may be withheld until a taxing unit submits a proper request. 3. Regular exemptions For each regular exemption, a total of one hundred dollars ($100) per applicant is reimbursed to the taxing unit. One half or fifty dollars ($50) is reimbursed for county taxes exempted. One-half or fifty dollars ($50) is reimbursed for school taxes exempted. The taxpayer is entitled to a maximum of three hundred dollars ($300) of exemption and a minimum of six dollars ($6) of exemption; however, the reimbursement made to the county will always be one hundred dollars ($100) per applicant. Each reimbursement check is accompanied by a Notice of Distribution, Form 72-036. This form indicates the amount of reimbursement to the county general fund and the school district fund. 4. Additional Exemptions For additional exemptions, the municipality in whose taxing district the applicant has claimed homestead property is reimbursed for the tax losses suffered. The actual tax loss suffered by the municipality is reimbursed with a limit of two hundred dollars ($200) per applicant. An eligible applicant is given his full exemption from the municipality; however, the reimbursement is limited to two hundred dollars ($200) per applicant. Each reimbursement check is accompanied by a Notice of Distribution, Form 72-037, which indicates the amount of reimbursement. 5. Amount To determine the amount of reimbursement due a taxing unit, begin with the figure shown on the Certificate of Tax Loss, subtract all charges, and add all credits. The result will be the total amount of reimbursement for the year. A taxing unit is limited in the amount of reimbursement it can receive. The amount of reimbursement cannot be more than one hundred six percent (106%) of the previous year's reimbursement. The reimbursement cannot be less than the amount reimbursed the previous year unless the number of applicants has been reduced. All documents needed to determine the actual amount of reimbursement due are sent to the various taxing units.

35 Miss. Admin. Code Pt. 6, R. 103 (Reserved)

Chapter 02 Adjustments

35 Miss. Admin. Code Pt. 6, R. 100 Rule 100

Occasionally, it becomes necessary to make adjustments to the request for reimbursement of tax loss. These adjustments are of three general classes, affecting the applicant and the taxing unit, affecting only the taxing unit, and affecting only the applicant.

35 Miss. Admin. Code Pt. 6, R. 101 Rule 101

CAUSES TO REJECT REIMBURSEMENT For the purpose of this article and specifically Section 27-33-41 (c), the phrase "substantial particular" shall include in its meaning the following conditions. These conditions shall be considered, by the Tax Commission, some of the more common

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causes to reject for reimbursement of tax loss any exemption granted by the Board of Supervisors. Note that the causes to reject for reimbursement are not limited to the conditions listed below. The charge(s) will be stated on the Notice of Adjustment, Form 72-026, which is sent to the taxing unit. Following the charge is the reference to the section of the laws that governs each particular situation.

35 Miss. Admin. Code Pt. 6, R. 101.01 Rule 101.01

The following charges are causes to reject reimbursement to the taxing unit and to disallow the applicant’s additional exemption: 1. Applicant is not a bona fide resident of Mississippi. 27-33-19 and 27-33-63 (2) 2. Applicant or applicant's spouse claims to be a resident of another state when assessed with income tax. 27-33-63(2) 3. Applicant is separated, does not have custody of minor children and does not live in the home at the time of separation. 27-33-13 (c) & (d) 4. Jointly owned property by separated husband and wife that is not the home at the time of separation is not eligible. 27-33-19 (c) 5. Applicant is not a natural person. 27-33-13 6. Taxing unit had no tax loss as a result of this application. 27-33-41 7. Applicant is not defined as the head of a family. 27-33-13 and 27-33-19 8. Application is incomplete causing eligibility to be undeterminable. 27-33-31 (n & r) and 27-33-41(c) 9. Application was not filed by April 1st. 27-33-31 (a) 10. Application was not signed by applicant or his spouse and a copy of written authority was not attached to the application. 27-33-31 (o) and 27-33-41 (c) 11. Signature of applicant was not acknowledged by Tax Assessor or his deputy. 27- 33-31 (a) and 27-33-33 (e) 12. Applicant or applicant's spouse was allowed exemption on other property. 27-33- 21 (c) 13. Exemption allowed on property not claimed on application. 27-33-32 (i) and 27- 33-35 (b) 14. Certified copy of resident county application was not attached. 27-33-31 (d) and 27-33-23 (f) 15. Exemption allowed on undivided estate property that is not eligible. 27-33-19 16. Dwelling and/or land not separately assessed on the land roll is not eligible. 27-33- 19 and 27-33-33 (a) 17. Disjoined urban property is not eligible. 27-33-35 and 27-33-21 (h) 18. Property containing more than for (4) disjoined tracts combined is not eligible. 27- 33-23 (e) and 27-33-21 (h) 19. Exemption allowed on property and/or dwelling that is not eligible. 27-33-19 and 27-33-21 20. a. Property containing more than 160 acres is not eligible. 27-33-23 (b) and 27- 33-21 (h) b. An assessed value exceeding $ 7,500 was allowed on the supplemental roll. 27-33-75 21. Disjoined tracts located more than five (5) miles from home tract are not eligible. 27-33-23 (e) and 27-33-21 (h)

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Property is not eligible. Applicant owned other eligible property that must be preferred. 27-33-23 (c) & (d) and 27-33-21 (h) 23. Applicant does not occupy the property as his primary home. 27-33-19 and 27-33-
The property is not eligible: a. The assessed value of the property associated with the business activity is greater than one-fifth (1/5) of the total assessed value of the home. 27-33-19 (h) b. The property is excluded from the definition of a home. 27-33-21 (a) & (b) (Property used as gins, sawmills, gas stations, repair shops, etc. is not eligible). 25. Any property and/or dwelling that is occupied under an agreement to buy or under a conditional sale is not eligible. 27-33-21 (d) 26. Property that is rented or is available for rent is not eligible. 27-33-21 (a) & (g) 27. Jointly owned land is not eligible when combined with individually owned land that has been claimed for exemption. 27-33-21 (e) 28. Individually owned land combined with land that holds a life estate is not eligible. 27-33-21 (e) 29. Property that has more than six (6) rooms available for rent is not eligible. 27-33- 19 (f) and 27-33-21 (a) 30. Property that keeps more that eight (8) boarders is not eligible. 27-33-19 (g) and 27-33-21 (a) 31. Applicant did not hold eligible title to this property on January 1. 27-33-17 (f) 32. The instrument by which applicant claims title to this property was not of record as of January 7. 27-33-17 (f) 33. Property claimed for exemption acquired by purchase where one-fourth (1/4) the price has not been paid and there is no instrument showing payments of normal interest and principal is not eligible. 27-33-21 (f) and 27-33-31 (l) 34. a. Applicant or applicant's spouse owns and/or is in possession of a vehicle with out of state tags. 27-33-63 (2). If the vehicle receives Mississippi tags, or if applicant is no longer in possession of vehicle, proof of such must be presented to the Clerk so that objection may be made to this charge. b. Applicant or applicant's spouse has failed to comply with road and bridge privilege tax laws. 27-33-63 (2). 35. Applicant or applicant's spouse has failed to comply with the income tax laws of Mississippi. 27-33-63 (2). If this income tax liability has been satisfied, proof of payment (Letter of Release) must be presented to the Clerk of the Board of Supervisors so that objection may be made to this charge. 36. Property with no residence is not eligible. 27-33-19 37. Property with no land value is not eligible. 27-33-19 38. Trust property not occupied or assessed to beneficiary is not eligible. 27-33-17 (b) 39. Valid application is not on file. 27-33-31 (a) 40. Applicant has made a fraudulent application. 27-33-31 (q) and 27-33-41 (c) 41. Applicant has requested homestead exemption to be removed. 27-33-41 42. Applicant and spouse are not actually and legally living together. 27-33-19 (c) 43. Applicant did not reside in the home as of January 1. 27-33-7

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35 Miss. Admin. Code Pt. 6, R. 101.02 Rule 101.02

*The following charges are causes to reject reimbursement of tax loss that affect only the taxing unit and not the applicant. 1. *No application was received in Tax Commission office in the manner as required by statute. 27-33-33(q), 27-33-35 (a), and 27-33-41 (c) 2. * There is an error in the supplemental roll count. 27-33-35 (d) and 27-33-41 (c) 3. *There is an error in the amount of reimbursement requested which is limited to $200 per applicant. 27-33-77

35 Miss. Admin. Code Pt. 6, R. 101.03 Rule 101.03

The following charge is the cause to disallow the applicant his additional exemption only. This charge does not affect the reimbursement to the county, but does disallow the applicant's additional exemption. This charge does effect the reimbursement to the municipality, if the applicant's property is located within the municipality's taxing district. **Applicant is not eligible for the additional exemption sought. 27-33-67 (2)

35 Miss. Admin. Code Pt. 6, R. 102 Rule 102

APPLICANT AND THE TAXING UNIT 1. The first class of adjustments affect both the applicant and the taxing unit. These adjustments are necessary because the exemption allowed is ineligible in its entirety. Subsection 101.01, paragraphs 1 through 43, are causes to deny an applicant's homestead exemption after it has been allowed by the county Board of Supervisors. When an applicant's exemption has been denied, it affects the amount of reimbursement due a taxing unit. The exemption no longer exists; therefore, the taxing unit does not suffer any tax loss. 2. Subsection 101.03 is the charge used when an applicant's additional exemption is disallowed. There are times when the qualification of the additional exemption has not been proved is disallowed. The reimbursement made to a county taxing unit is not affected. No additional money is reimbursed for an additional exemption. The reimbursement to a municipal taxing unit would be affected because only additional exemptions are reimbursed to a municipality. In both cases the applicant's exemption would be reduced from the additional exemption status to the regular exemption status.

35 Miss. Admin. Code Pt. 6, R. 103 Rule 103

TAXING UNIT ONLY The second general class of adjustments are those that affect the taxing unit only. These adjustments do not affect the applicant's exemption, only the amount of reimbursement due a taxing unit. Subsection 101.02, paragraphs 1, 2, and 3 are the causes for this type of adjustment. 1. No application received Subsection 101.02, paragraph 1 This applies to the procedure of sending the applications to the Tax Commission office. According to the statute, an application must be in the Tax Commission office by June 1 or the request for reimbursement is to be denied. If, when examining the supplemental roll, no application can be found for a name that is listed, the request for reimbursement of that missing applicant will be rejected. 2. Error in supplemental roll Subsection 101.02, paragraph 2 This applies to errors made in the count of the number of applicants on the supplemental roll. If, upon examination, an error in the count of applicants on the

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supplemental roll is found, an adjustment shall be made to correct the amount of reimbursement equal to the difference in the count. 3. Error in Reimbursement request Subsection 101.02, paragraph 3 When a municipality has requested reimbursement for an applicant that exceeds the two hundred dollar ($200) limit per applicant, this charge will be made to the municipality. This adjustment does not affect the applicant's exemption, but will reduce the reimbursement to the municipality. This code applies to municipalities only.

35 Miss. Admin. Code Pt. 6, R. 104 Rule 104

APPLICANT ONLY The last class of adjustments are those that will affect only the amount of exemption the applicant received. The following conditions are considered causes to allow only a fraction of the exemption claimed. These conditions do not affect the reimbursement of tax loss to the taxing unit, only the amount of exemption granted an applicant. The Tax Commission determines if the applicant is eligible. The county determines how much exemption will be allowed. Details of the following conditions are discussed in Title 35 of the Mississippi Administrative Code, Part VI, Subpart 2, Chapter 6. 1. One apartment rented A dwelling having no more than two (2) apartments or a duplex when the owner of the dwelling lives in one apartment or side and rents out the other apartment or side. The owner would be eligible for one-half (1/2) the exemption allowed. 27-33-19 (e). 2. Less than six (6) rented rooms A dwelling which has no more than six (6) rooms to be rented with an apartment counting as three (3) rooms when the owner occupies the dwelling as a home. The owner would be eligible to one-half (1/2) the exemption allowed. 27-33-19 (f). 3. Business activity In order to receive homestead exemption on a dwelling owned and occupied by the head of a family in which a business activity is conducted, the assessed value associated with the business must be less than one-fifth (1/5) of the total assessed value of the home. If the activity is a full time business, the owner would be eligible for one-half (1/2) the exemption allowed. 27-33-19 (h). 4. Joint Ownership When eligible property is jointly owned, the applicant, who is one of the owners, is eligible for exemption on his proportional share of the total assessed value of the property. 27-33-19 (b).

35 Miss. Admin. Code Pt. 6, R. 105 (Reserved)

Chapter 03 Applicants 100 This rule applies to the requirements the applicant must meet in order to receive the privilege of homestead exemption. If all the following requirements are not met by the applicant, the homestead exemption shall be denied. The date upon which all facts are determined is January 1 st of the year in which the homestead exemption is sought. A person requesting homestead exemption must: make a written application,

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be a natural person, be the head of a family, have ownership and eligible property, occupy the dwelling as a home, and be a Mississippi resident. Each of these requirements is discussed in detail. 101 Before the exemption can be allowed, the applicant must make a written application between January 1 st and April 1 st of the year in which the exemption is sought. The applicant alone is responsible for making the application and furnishing all information required by the application. The application must be complete, true, and correct. The applicant's responsibility does not end until the entire application (the original, duplicate, triplicate, and quadruplicate copies) has been delivered to the Tax Assessor on or before April 1 st . The quadruplicate copy is to be signed and dated by the Tax Assessor or his deputy, marked "filed," and returned to the applicant. If a change in the homestead or the applicant's status occurred since January 1 st of the previous year, a new application must be filed between January 1 st and April 1 st . Further details of the application itself are found in Chapter 08 - Applications.

35 Miss. Admin. Code Pt. 6, R. 102 Rule 102

An applicant for homestead exemption must be a living person. The applicant cannot be an estate, a corporation, or a partnership.

35 Miss. Admin. Code Pt. 6, R. 103 Rule 103

An applicant must be considered the head of a family as defined by Miss. Code Ann. Section 27-33-13. The "head" is the representative of the family. There can be only one head of a family for one homestead. Further details of this definition are found Chapter 04 - Head of Family.

35 Miss. Admin. Code Pt. 6, R. 104 Rule 104

An applicant must have eligible title to property in order to file for the exemption. The homestead exemption law provides that only the taxpayer who is legally liable for the ad valorem taxes can be exempt from them. The owner of the property is the only person who has the legal responsibility of paying the taxes due on the property. The applicant must possess an eligible ownership interest in the property, as set out in Miss. Code Ann. Section 27-33-17, in order to file a lawful claim for any sort of tax exemption. Details of the definition of eligible types of ownership are found in Chapter 05 - Ownership.

35 Miss. Admin. Code Pt. 6, R. 105 Rule 105

Only a homestead, as described in Miss. Code Ann. Section 27-33-19, can be eligible property when filing for the homestead exemption. Miss. Code Ann. Section 27-33-21 describes property that is expressly ineligible for homestead purposes. Eligible property must include a dwelling which is occupied by the applicant as a home, as well as any outbuildings or improvements connected with that dwelling, and the land upon which the dwelling stands. Details of eligible property are found in Chapter 06 - Property. 106 The State of Mississippi does not grant the homestead exemption to people who are not residents of this state. The applicant and the applicant's spouse must be residents of

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Mississippi to be eligible for homestead exemption benefits. The filing of a Mississippi resident income tax return shall be the best proof of residency.

35 Miss. Admin. Code Pt. 6, R. 107 Rule 107

In order to be eligible for the homestead exemption, the applicant must comply with income tax laws and the road and bridge privilege tax laws of the State of Mississippi. 1. Income Tax Laws: When an individual is determined by the Income Tax Division to be delinquent in income taxes, a letter is issued to disallow their homestead exemption. The Homestead Exemption Division will reject reimbursement for that applicant and issue a charge for failure to comply with the income tax laws. As soon as the applicant has paid the delinquent tax, a letter of release is issued to the applicant. The applicant should present this letter to the Clerk of the Board of Supervisors prior to February 1 st . The Clerk of the Board of Supervisors is able to object to the charge. A copy of the release letter must be attached to the objection in order for the homestead exemption to be reinstated. 2. Road and Bridge Privilege Tax Laws: Each applicant must be in compliance with the road and bridge privilege tax laws in order to receive the homestead exemption. When an applicant owns or possesses a vehicle with an out-of-state or out-of-county tag and is not in compliance with the road and bridge privilege tax laws, the applicant is not eligible for the homestead exemption. If the applicant is in possession of a vehicle that is owned by a business located outside the state, the applicant is in compliance with the road and bridge privilege tax laws and is allowed the homestead exemption. 108 Some applicants may qualify for an additional exemption on homestead property. The limits of seven thousand five hundred dollars ($7,500) of assessed value and one hundred sixty (160) total acres still apply; however, the amount of the exemption is increased to include all ad valorem taxes for that property, not just the amount determined by the table found in Miss. Code Ann. Section 27-33-75. These conditions are discussed below. 1. Over 65: If an applicant is over the age of sixty-five (65), the applicant qualifies for the additional exemption. Evidence that shows the date of birth is required to be shown to the Tax Assessor. The date of birth is to be written on the application. If a husband and wife are joint owners and filing on a homestead and either one is over sixty-five (65), the entire application receives a full additional exemption. This is true only for a husband-and-wife joint ownership. 2. Total Disability: For an applicant to qualify for total disability, the applicant must be considered totally disabled under the definition set out in the Federal Social Security Act, the Railroad Retirement Act, or the provisions of the Internal Revenue Code. From and after January 1, 2026, the unremarried surviving spouse of an

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individual who qualifies for the total disability exemption also qualifies for the exemption. An applicant will also qualify for the total disability exemption if the applicant is an honorably discharged veteran with a service-connected total disability or is the unremarried surviving spouse of such a veteran. a. Definition: The definition of totally disabled as set out by the Federal Social Security Act is as follows: “...the term “Disability” means (A) inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or has lasted or can be expected to last for a continuous period of not less than 12 months, or (B) blindness, and the term “blindness” mean central visual acuity 20/200 or less in the better eye with the use of a correcting lens. An eye which is accompanied by a limitation in the fields of vision such that the widest diameter of the visual field subtends an angle no greater than 20 degrees shall be considered for purposes of the paragraph as having a central visual acuity of 20/200 or less....” b. Proof: The evidence which shall be accepted as proof of the disability is listed below. Any one of these forms of proof should be sufficient. i. Veteran's Consent of Release (Form 72-042) ii. Report of Confidential Social Security Benefit Information (Form 72- 051) iii. Letter from Railroad Retirement Act disability iv. Schedule R or Schedule 3 - Federal Income Tax Forms v. Letter from an employer outlining the disability vi. Detailed letters from two physicians outlining the disability and its expected duration. 3. Honorably Discharged Veteran Who Has Reached Ninety (90) Years of Age: For an applicant to qualify for the additional exemption, the applicant must be an honorably discharged veteran and have reached ninety (90) years of age on or before January 1 st of the year the exemption is claimed. Supporting documentation that may be used as evidence when applying for this exemption includes the applicant’s (1) birth certificate or state-issued ID and (2) DD Form 214, commonly referred to as Discharge Papers, Certificate of Release, or Report of Separation. From and after January 1, 2026, the unremarried surviving spouse of such a veteran will also qualify for the exemption. 4. Unremarried Surviving Spouse of Servicemember Killed on Active Duty: For an applicant to qualify for the additional exemption, the applicant must be the unremarried surviving spouse of (1) a member of the United States Armed Forces who was killed or died on active duty or (2) a member of a reserve component of the United States Armed Forces or of the National Guard who was killed or died on active duty for training. Supporting documentation that may be used as evidence when applying for this exemption includes the

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deceased servicemember’s (1) death certificate and (2) DD Form 214, commonly referred to as Discharge Papers, Certificate of Release, or Report of Separation.

35 Miss. Admin. Code Pt. 6, R. 109 Rule 109

PENALTIES 1. Any person who swears under oath to the truthfulness of an application which is found to contain a false statement is guilty of perjury. 2. Any person who knowingly makes a false claim for exemption or a false statement on the application or omits a material fact on the application in order to obtain an exemption is guilty of a misdemeanor. Anyone who assists another in preparing a false claim for exemption is also guilty of a misdemeanor. If the person is convicted, the punishment includes a fine of not more than five hundred dollars ($500) or six (6) months imprisonment. If an exemption is obtained under a false claim, the person obtaining such an exemption is liable for double the amount of taxes lost. 3. In addition to the above, anyone who submits a fraudulent application in violation of Miss. Code Ann. Section 27-33-31 is guilty of a felony.

35 Miss. Admin. Code Pt. 6, R. 110 (Reserved)

35.VI.3.03 revised effective September 4, 2025

Chapter 04 Head of Family

35 Miss. Admin. Code Pt. 6, R. 100 Rule 100

Only the head of the family is eligible for homestead exemption. The definition of "Head of Family" is limited to the persons defined in this rule. Only single family property can be considered as homestead property; therefore, there can be only one head of a family per homestead. There is no age limitation for an applicant to be head of family.

35 Miss. Admin. Code Pt. 6, R. 101 Rule 101

MARRIED PERSONS Any married person living with their spouse is defined as head of a family. The property may be owned by one or both spouses. Only one application is filed with both names on the application. If an applicant is married, the husband's and the wife's name are required on the application. The homestead exemption application does not affect the ownership of the property on which exemption is sought. An application may be denied as incomplete if the applicant's spouse is not listed. (Rule 2, Code 08).

35 Miss. Admin. Code Pt. 6, R. 102 Rule 102

SEPARATED PERSONS Any married person who does not live with their spouse, but is not divorced, is defined as being separated. 1. a. A separated person who has legal custody of one or more minor children and occupies and maintains a home for them is considered head of a family. If this home is not the home at the time of separation, the home must be owned solely by the custodial parent because of the definition of eligible

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property in Title 35 of the Mississippi Administrative Code, Part VI, Subpart 2, Chapter 6. b. If the court has awarded joint custody, both spouses shall be seen as having legal custody of a minor child. 2. A separated person who occupies a home is eligible for exemption if he or she did not file a joint income tax return, has custody of minor child or occupies the marital home. 3. EXAMPLES: a. A husband and wife separate. Wife lives in the home at the time of separation. Husband buys another home at the time of separation in his name alone and has custody of a minor child. Both persons are considered as head of a family and are eligible for homestead exemption, if they meet all other requirements. b. Same details as above except husband has no minor children. Wife is considered as head of a family and is eligible for homestead exemption after meeting all other requirements. Husband is eligible if he does not file a joint income tax return. c. Husband and wife separate and have no children. They sell the home at the time of separation and each buy another house. Both are considered head of family and are eligible if they file separate income tax returns.

35 Miss. Admin. Code Pt. 6, R. 103 Rule 103

SINGLE PERSON Any person who is not married or separated is defined as single. This includes divorced and widowed persons. Two types of single persons may be considered a head of a family.

35 Miss. Admin. Code Pt. 6, R. 103.01 Rule 103.01

Occupying The first type is the single person who occupies the dwelling himself as a home. A minor may also file for homestead if he owns and occupies a home when residing with his parents or legal guardian. 1. Alone A single person is considered a head of a family if he permanently maintains a home that he occupies alone. 2. Group A single person is one of a group of two or more single people who: a. are related in the third degree b. hold collective eligible titles c. occupy and maintain the home for themselves, is considered head of family. Examples of third degree relations are parent and child, brother and sister, uncle and nephew, grandparent and grandchild. 3. If two or more single individuals, who are related in the third degree, jointly own and occupy the property and wish to file for homestead exemption, one application should be filed indicating one individual as the head of family. The other(s) should be shown as occupying joint owner(s). If one individual is eligible for an additional exemption and the other(s) are not, the amount of exemption is determined by each person's share and their qualifications.

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If two single individuals, who are not related, jointly own and occupy a home and wish to file for homestead exemption, only one may file as head of family for that homestead property. The other should be listed as an occupying joint owner. The applicant receives one-half (1/2) exemption of the assessed value of the property. 5. EXAMPLES: a. Two sisters live in a home jointly owned by them. One sister is 70 years old and the other is 60 years old. One of the sisters files as head of a family on one application. The amount of the exemption on property with $6,000 assessed value and a tax liability of $500 would be $250 for the half due the sister over 65 and $120 (Section 27-33-75) for the half due the sister under 65 for a total exemption of $370. b. Two friends who are both under 65 years old live in a home jointly owned by them. Only one may file a homestead application on their property that has an assessed value of $8,000 and a tax liability of $500. That applicant is entitled to full exemption on one-half (1/2) of the total assessed value of the property, in this case, an exemption on $4,000 of assessed value property equal to $162 against the tax liability of $500. c. Two friends, one of whom is over 65 years old and one who is not, live in a home jointly owned by them. Only one may file a homestead application on their property that has an assessed value of $15,000. Whichever owner files, he is entitled to a full exemption on one-half (1/2) of the total assessed value of their property, in this case $7,500. If the joint owner over 65 files, the application qualifies for an additional exemption. If the joint owner under 65 files, the application carries a regular exemption.

35 Miss. Admin. Code Pt. 6, R. 103.02 Rule 103.02

Non-occupying 1. A single person may also qualify as a head of a family, if he permanently maintains a home for the benefit of someone who is dependent upon him for support. The single person may not live in the home because of necessity. This single person can only be the head of a family for one family group and for one exemption. 2. EXAMPLES: a. Ex-husband and ex-wife jointly own the home. Ex-wife lives in home with child and contributes to the maintenance of the home. Ex-husband also contributes to the maintenance of the home through court decree. Neither one files on any other property. Both are eligible to file and either one would receive exemption on one-half (1/2) of the total assessed value of the property. However, only one may file for exemption in this situation. b. Child owns and maintains a home for an elderly parent. Child lives in an apartment and does not file for homestead exemption anywhere else. Child is eligible for an exemption on the home of the elderly parent.

35 Miss. Admin. Code Pt. 6, R. 104 Rule 104

MINOR CHILD A minor child who owns and occupies a home and resides with a parent or guardian may qualify as head of family.

35 Miss. Admin. Code Pt. 6, R. 105 (Reserved)

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Chapter 05 OWNERSHIP

35 Miss. Admin. Code Pt. 6, R. 100 Rule 100

An applicant must have some legal title to the property on which exemption is sought. The tax responsibility is his. Legal title must be present to seek exemption. The definition of eligible title for homestead purposes is limited to the following.

35 Miss. Admin. Code Pt. 6, R. 101 Rule 101

FEE TITLE This type of title is most common. It is considered inheritable title. It can be obtained by purchase, gift or inheritance. Fee title can be held individually or jointly. Three (3) types of fee title are mentioned in Section 27-33-17 (a). 1. Absolute This type of title is not restricted. It is held by a single individual. When a person holds absolute title, it is indicated on Question 6 of the application as Fee. 2. Life Estate This type of ownership has a special condition. A person can deed property to another and retain a life estate interest in that property. As long as the person with the life estate interest is living, that person has rights and privileges to that property. Only the person with the life estate interest is eligible for homestead exemption. It is possible for more than one person to have a life estate interest in property. In this instance, they will be treated as joint owners with each having his proportional share in the exemption. 3. EXAMPLES: a. A mother deeds her property to her son and retains a life estate interest in it. She goes to live with her daughter and her son lives on the property. Until the life estate interest is removed, only the mother has an eligible ownership interest. Since she does not live on the property herself, no one is entitled to the exemption. b. Property is deeded to a grandson with a life estate interest given to the grandfather and the great uncle. Only the grandfather lives on the property. The grandfather would be treated like a joint owner and eligible for an exemption on one-half (1/2) of the total assessed value of the property. 4. Joint Owners Under this type of title, more than one person shares in the ownership of property. These owners may or may not be related. There is no limit to the number of owners one piece of property can have. If property is jointly owned, any one of the owners who meets all the requirements may file homestead exemption equal to his proportional share; however, only one may file for the homestead property. If these joint owners are related within the third degree, only one application should be filed. These owners would be eligible for full exemption. Homestead exemption law discusses two types of joint owners, through inheritance and through purchase. These differences are detailed in Title 35 of the Mississippi Administrative Code, Part VI, Subpart 2, Chapter 6.

35 Miss. Admin. Code Pt. 6, R. 102 TRUSTS

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This type of title has some conditions that must exist to be considered eligible. The property being placed in trust must be clearly described. The beneficiary of the trust must occupy the property as a home and must be assessed with the taxes of that property. If all these conditions are present, the trust is considered eligible title.

35 Miss. Admin. Code Pt. 6, R. 103 Rule 103

LEASES There are four (4) types of leases of land that are defined by law as constituting sufficient eligible ownership rights to meet homestead exemption requirements. 1. School lands Persons who have legal leases of school lands that are perpetually renewable or leased for ten (10) years or more are considered to have eligible title. 2. Pearl River Valley Water Supply District lands Persons who have a legal lease of these lands for twenty (20) years or more with an option for renewal every ten (10) years have eligible title. 3. Fraternal or benevolent lands Persons who have a lease of fraternal or benevolent lands for a period of ten (10) years or more or for life have eligible title. 4. Mississippi-Yazoo Delta Levee Board lands Persons who have a lease of these lands for five (5) years or more with an option for renewal every five (5) years.

35 Miss. Admin. Code Pt. 6, R. 104 Rule 104

DATES There are two dates that must be considered in determining the eligible ownership for homestead exemption purposes. 1. Acknowledgment date The date that one becomes the owner of property is the date of acknowledgment of the instrument by which one acquires the title. The acknowledgment date must be no later than January 1 of the year in which he files the application. Unless property is owned by that date there is no legal liability for taxes. 2. Recording date The instrument by which title is held must be filed for record with the Chancery Clerk with the county in which the property is located on or before January 7 of the year for which homestead exemption is sought. The book and page number must be shown on the application.

35 Miss. Admin. Code Pt. 6, R. 105 (Reserved)

Chapter 06 Property

35 Miss. Admin. Code Pt. 6, R. 100 Rule 100

Only certain property is eligible for homestead exemption. In this rule, the requirements for homestead property are discussed.

35 Miss. Admin. Code Pt. 6, R. 101 Rule 101

ASSESSMENT All property on which exemption is claimed must meet the following requirements concerning the assessment of the property.

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35 Miss. Admin. Code Pt. 6, R. 101.01 Rule 101.01

Identification For taxation purposes, all property must be given a value. That value must be assigned to a definite piece of property. The property to which a value has been assigned must be identified. The identification should be a parcel number that is unique within a county. The parcel number on the supplemental roll must be the same parcel number on the application.

35 Miss. Admin. Code Pt. 6, R. 101.02 Rule 101.02

Separately assessed All such identified property on which homestead exemption is claimed must be separately assessed on the land roll. No property may be eligible for exemption unless it contains a value for land and a value for the dwelling. The land and dwelling must be separately assessed on the land roll or no exemption may be allowed. A special provision is made if a dwelling has been destroyed. The property can continue to be eligible for homestead for one (1) year after the date of destruction.

35 Miss. Admin. Code Pt. 6, R. 101.03 Rule 101.03

Limits 1. Exemption is limited to the first seven thousand five hundred dollars ($7,500) of assessed value on homestead property. Any assessed value over the first seven thousand five hundred dollars ($7,500) does not have any exemption and the full amount of taxes must be paid on the balance. The assessed value limit includes the land and all buildings and improvements attached to the land. The seven thousand five hundred dollars ($7,500) limit includes all parcels claimed by an applicant. The amount in column 7 or column 11 must not exceed this seven thousand five hundred dollars ($7,500) limit when all parcels are totaled. 2. Another limit has to do with the number of acres that a homestead exemption claim can include. All homestead property has a limit of one hundred sixty (160) acres when all parcels are totaled.

35 Miss. Admin. Code Pt. 6, R. 102 Rule 102

LOCATION The location of the property has an effect on the determination of eligibility for homestead exemption. There is no limit to the number of joined parcels located inside or outside a municipality. The definition of joined is one or more points of common boundary. A lot in a subdivision is considered a parcel.

35 Miss. Admin. Code Pt. 6, R. 102.01 Rule 102.01

Property inside a Municipality If all the property claimed for exemption is located inside a municipality, all the property on which homestead exemption is sought must actually join. If the land is platted, a public street or canal that divides the land prevents it from being joined. If the land is not platted, then the street dividing the property is disregarded and the land is considered joined.

35 Miss. Admin. Code Pt. 6, R. 102.02 Rule 102.02

Property inside and outside a Municipality If part of the property claimed for exemption is located inside a municipality and part of the property lies outside the municipality, all the land must join. If any portion of the land is located within a municipality, all the land must join.

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35 Miss. Admin. Code Pt. 6, R. 102.03 Rule 102.03

Property outside a Municipality If the property lies outside a municipality, the land does not have to join. A maximum of only four (4) disjoined tracts may be claimed for exemption. (Only three (3) disjoined tracts may be added to the home tract). None of these tracts may be located more than five (5) miles from the home tract, which is the tract of land upon which the applicant's dwelling is located.

35 Miss. Admin. Code Pt. 6, R. 102.04 Rule 102.04

Property in adjoining counties If the applicant owns less than the one hundred sixty (160) acres in the county in which the dwelling is located, he is permitted to add to his homestead exemption claim any eligible property located in an adjoining county. Again the limits of one hundred sixty (160) total acres and five (5) miles from the home tract are placed on the property claimed for homestead exemption. In the case of land in an adjoining county, the applicant must file in both counties. First the applicant should file in the resident county and have two certified copies made of the application and carry them to the adjoining county. These copies should contain the assessed value given the land and dwelling and the total assessed value given the land allowed by the resident county. One copy is sent with the original application of the adjoining county that is sent to the Tax Commission (do not attach) and the other copy attached to the duplicate that is kept on file in the adjoining county.

35 Miss. Admin. Code Pt. 6, R. 102.05 Rule 102.05

Order of preference The location of all property which may be claimed for exemption is determined by the location of the dwelling of the applicant. The order of which property has priority is as follows: 1. All eligible property in the county of the applicant's dwelling is preferred over property in another county. 2. If the applicant's dwelling is located outside of a municipality, eligible rural land is preferred over eligible urban land. 3. Forty (40) acre tracts are preferred over tracts of lesser area. 4. Adjoining land of the same section is preferred over other eligible property. 5. If all the land is not joined, land nearest the dwelling and in the same county is preferred.

35 Miss. Admin. Code Pt. 6, R. 103 Rule 103

JOINT OWNERSHIP Homestead exemption deals separately with two types of jointly owned property, by inheritance and by all other means. If a person files on any individually owned property, that person can not file on any jointly owned property. There two exceptions to this rule: 1. A surviving spouse who files on individually owned property may add property acquired in an undivided estate. In this case, the jointly owned undivided estate property is eligible. 2. Husband and wife may file on property owned jointly or individually.

35 Miss. Admin. Code Pt. 6, R. 103.01 Rule 103.01

By inheritance This type of jointly owned property is the result of an inheritance, either with or without a will. The property is considered an estate. An estate is treated as undivided for

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homestead exemption purposes until the property has been distributed with fee title or life estate to the various heirs. If some part of the undivided estate is distributed to an heir or to a purchaser, that part is removed from the undivided estate. If by exchange of deeds, court decrees, or any other process, each of the heirs is given fee title to parts of the estate, such parts will be taken away from the undivided estate. Undivided estate property claimed for homestead exemption can not be combined with any other land, except in the case of a surviving spouse. A surviving spouse can combine individually owned property with undivided estate property. The property limits of one hundred sixty (160) acres and seven thousand five hundred dollars ($ 7,500) of assessed value will remain. 1. One files The heirs of the undivided estate can elect to file for one homestead exemption on the entire undivided estate. The requirements for homestead exemption eligibility must be met. The estate must be undivided. If that election is made, all heirs must agree and proof of such is to be attached to the application. The proof needed is Form 72-049, Election to File One Homestead. The form is provided by the Tax Commission. When the election to file for one homestead exemption is made, no other claim may be filed on that undivided estate for that year. The election to file for one homestead exemption does not prohibit the heirs from filing separately in later years. 2. More than one files Any one of the heirs who meets homestead eligibility requirements can file for homestead exemption on their inherited portion. The home occupied by the surviving spouse has preference over the homes of any other heirs. If the surviving spouse filed for homestead exemption, that portion is deducted from the rest of the undivided estate. The other heirs must share equally in the remainder. If more than one heir files for exemption on the undivided estate, the election to file for one homestead exemption later is not prohibited. 3. EXAMPLES: a. Husband dies leaving wife and two (2) children. Wife lives on property and all heirs elect to file for one homestead exemption. Title is still held by the estate. Wife remarries. Wife dies leaving husband number 2 living on the undivided estate. Heirs can still elect to file for one homestead with husband number 2 as the applicant. b. Same details as in number 1 except all heirs have now received their portion of the undivided estate in fee title. Husband number 2 and each child receive full exemption on their portion.

35 Miss. Admin. Code Pt. 6, R. 103.02 Rule 103.02

By Purchase, etc. This type of joint ownership includes all other means by which ownership is obtained, except inheritance. The term joint owner includes tenants in common and joint tenants for homestead purposes. 1. One dwelling There are four (4) cases of joint ownership and a single dwelling. a. Husband and wife

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Jointly owned property by a husband and wife is eligible for full exemption on the entire property, if the husband and wife are living together. If they are separated, only jointly owned property that is the home at the time of separation is eligible for full exemption. Any other jointly owned property of a separated person is ineligible for homestead exemption purposes. b. Related single persons Jointly owned property by a group of related persons as defined by Section 27-33-13 (f) is eligible for full exemption on the entire property if all persons in the group have the same type of title. Only one member of the group can file. c. Unrelated single persons Jointly owned property by two or more persons who do not fall under the definition of Section 27-33-13(f) or who are not married is eligible for one exemption based on the proportionate share of the applicant's ownership. d. Duplex (2 apartments) Jointly owned property by two persons consisting of two (2) apartments, such as duplex, when each owner occupies an apartment or side is eligible for full exemption for each owner on their equal share of the assessed value of the property. e. EXAMPLES: i. Husband and wife, living together, own a home assessed at $15,000. That home is eligible for one exemption limited to $7,500. ii. Separated husband and wife jointly own two homes. Each have custody of a minor child or joint custody of one child and each live in one of the jointly owned homes. Only the home at the time of separation is eligible. If the other home was titled in only the resident spouse's name and they have not filed a joint income tax return, that home would be eligible. iii. Two sisters own and occupy a home assessed at $15,000. The home is eligible for one exemption limited to $7,500. iv. Three (3) unrelated single persons live in a house assessed at $15,000. Each person has a proportionate share of one-third (1/3) of the total assessed value of the property. Only one can file on this homestead with the two other owners listed as occupying joint owners. He would be entitled to an exemption on his share limited to $2,500 of assessed value. 2. More than one dwelling a. Jointly owned property that has more than one of the dwellings is eligible. Each joint owner that occupies one of the dwellings can file for exemption on his proportionate share of the total assessed value of all the property. b. EXAMPLES: i. Three (3) persons jointly own property that includes five hundred (500) acres and three (3) houses with a total assessed value of $33,000. Each person can file a homestead exemption claim on the property occupied by his family, if they meet all requirements for eligibility. Each person's share would be one-third of the total

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property or one hundred sixty-seven (167) acres with an assessed value of $11,000; however, the exemption is limited to one hundred sixty (160) acres and a total assessed value of $7,500. ii. Three (3) persons jointly own property that includes one hundred fifty (150) acres and three (3) houses with a total assessed value of $15,000. Each persons share and exemption would include fifty (50) acres and one house with a total assessed value of $2,500. iii. Two persons buy one hundred (100) acres of land. They build a house on that property and each hold separate title to their respective homes. Both may file for an exemption which would include one-half (1/2) the assessed value of the land plus the assessed value of their respective homes.

35 Miss. Admin. Code Pt. 6, R. 104 Rule 104

USE The anticipated use of all property claimed for homestead exemption is that of a home. Some exceptions to this use are allowed by law and the amount of the exemption allowed to the applicant or the amount of reimbursement made to the taxing unit would not be affected. Other exceptions are permitted by law and the amount of reimbursement made to the taxing unit is not affected; however, the amount of exemption allowed to the applicant would be affected. Some uses expressly deny homestead exemption to that property.

35 Miss. Admin. Code Pt. 6, R. 104.01 Rule 104.01

Rented property Rented property includes rooms within a home being rented and also entire homes being rented. The amount of exemption and reimbursement due is determined by how many rooms are being rented. An apartment is counted as three (3) rooms. Sharecropper or tenant homes are not considered to be rented when only a share of the agricultural crop is given in consideration. 1. allowed a. Property occupied by a family group that keeps no more than eight (8) boarders or paying guests is eligible for full exemption. b. Property occupied by a family group where no more than four (4) rooms are rented or are available for rent is eligible for full exemption. 2. allowed in part a. Property consisting of four (4) apartments, where one apartment is occupied by the family group that owns the home and the other apartments are rented is eligible for one-fourth (1/4) of the exemption allowed. b. Property occupied by a family group where five (5) or six (6) rooms are rented or are available for rent is eligible for one-half (1/2) of the exemption allowed. 3. disallowed a. Any property that is rented in its entirety does not qualify for homestead exemption. b. Property occupied by a family group where more than eight (8) boarders are kept is not eligible. c. Property occupied by a family group where more than six (6) rooms are rented or are available for rent is not eligible.

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35 Miss. Admin. Code Pt. 6, R. 104.02 Rule 104.02

Business activity Most people transact some business in their home, such as writing a check to pay a household expense or having a garage sale. The law does give some definitions as to business activity that will limit or even deny homestead exemption. 1. allowed Property occupied by a family group wherein business activity is conducted; however, the assessed value of the property associated with the business activity must be less than one-fifth (1/5) of the total assessed value of the home. 2. allowed in part If the assessed value of the property associated with the business does not exceed one-fifth of the total assessed value of the home and the property is occupied by a family group that houses a full time business, one-half (1/2) of the eligible exemption may be allowed. 3. disallowed a. Property occupied by a family group where any part is used by anyone for business purposes except as stated in the above two paragraphs is not eligible for homestead exemption. Property occupied by a family group where any part is used as a gin, sawmill, store, gasoline station, repair shop, manufacturing or processing plant, hotel, motel, tourist court, apartment house with no more than two (2) apartments, and the like are specifically ineligible for homestead exemption. b. If it is possible to split the parcel into the residence and the business, this would be an ideal way to handle a business in the home. In this way the residential parcel may be assessed as a residence only and the business parcel can be assessed as a business. c. EXAMPLES: i. A beauty shop is located in the home in a room where the family has their washer and dryer. There is a sink and hair dryer and a chair for the customers. If the assessed value of this small business and equipment is less than one-fifth (1/5) the total value of the home, this business would not effect the amount of homestead. If this business is the full-time occupation of the owner, the homestead is limited to one-half (1/2) of the exemption allowed. ii. A person has a small grocery store in his house. The store is on the first floor and the family resides on the second floor. The homestead exemption is disallowed because grocery stores are specifically excluded from the definition of eligible homestead property by Section 27-33-21 (b). iii. A person has a small store in the front of his house. There is a wall separating the store from the rest of the house. The parcel is split down this wall and the owner is assessed on a residential parcel which can receive the 10% assessment rate with homestead exemption and a business parcel which receives the 15% assessment rate.

35 Miss. Admin. Code Pt. 6, R. 105 OCCUPANCY

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In order for property to be eligible for homestead exemption, it must actually be occupied by the applicant with only one family group to a dwelling. The exceptions to this general requirement are listed below. With these exceptions, all other requirements needed for homestead exemption must be met for the property to be eligible. If one of the following people has another person live in the home, for whatever reason, the property will become ineligible.

35 Miss. Admin. Code Pt. 6, R. 105.01 Rule 105.01

Non-occupying single persons Applicants who fall under the definition of Section 27-33-13 (e) do not have to occupy the property on which homestead exemption is sought. This is also discussed in Rule 4 - Head of Family

35 Miss. Admin. Code Pt. 6, R. 105.02 Rule 105.02

Ministers and teachers Only property owned and occupied as a home by a minister or a licensed school teacher, whose occupation keeps them away for long periods of time, is eligible. The statute allows for these two types of jobs. No other individuals whose business calls for them to be away can claim this exemption. No other family group can occupy the home for any reason.

35 Miss. Admin. Code Pt. 6, R. 105.03 Rule 105.03

Institutionalized persons Section 27-33-19 (j) states that property owned by a person who is physically or mentally unable to care for himself and confined to an institution for treatment is eligible. This exemption is available for a period of five (5) years from the date of confinement. If a county requires annual homestead filing, arrangements should be made to have an attorney, agent, or guardian sign for the confined person.

35 Miss. Admin. Code Pt. 6, R. 106 Rule 106

SPECIFICALLY ELIGIBLE PROPERTY Some property that has certain conditions is considered eligible by statute.

35 Miss. Admin. Code Pt. 6, R. 106.01 Rule 106.01

Leased lands Leased property that is listed in Section 27-33-17 (c), (d) and (f), and that is occupied by a family group is eligible.

35 Miss. Admin. Code Pt. 6, R. 106.02 Rule 106.02

Condominiums Condominiums are considered separate dwellings when separately assessed. Also included in this category are townhouses and duplexes.

35 Miss. Admin. Code Pt. 6, R. 106.03 Rule 106.03

Housing authority Property that is occupied by a family group, but whose title and ownership has been conveyed to a housing authority, is eligible.

35 Miss. Admin. Code Pt. 6, R. 107 Rule 107

Specifically Ineligible Property Some property is considered ineligible by statute.

35 Miss. Admin. Code Pt. 6, R. 107.01 Conditional

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Property occupied under an agreement to buy or under a conditional contract is not eligible property for homestead exemption.

35 Miss. Admin. Code Pt. 6, R. 107.02 Rule 107.02

One-fourth purchase price Property on which one-fourth (1/4) of the purchase price has not been paid or where payments for the property do not show a reasonable interest rate and payment schedule is not eligible.

35 Miss. Admin. Code Pt. 6, R. 107.03 Rule 107.03

Separate interests Mineral rights or timber leases or any such land interest that is separately assessed and that is attached to property on which homestead exemption has been claimed can not be included in the assessed value of the homestead exemption property.

35 Miss. Admin. Code Pt. 6, R. 107.04 Rule 107.04

Other property Any property owned by an applicant who has received homestead exemption on any other property in this state is not eligible.

35 Miss. Admin. Code Pt. 6, R. 107.05 Rule 107.05

Different types of ownership Individually owned land that has been claimed for homestead exemption purposes is not eligible when combined with jointly owned property except in the case of a surviving spouse or husband and wife. Individually owned property is never eligible when combined with property that has a life estate interest.

35 Miss. Admin. Code Pt. 6, R. 108 (Reserved)

Chapter 07 Supplemental Roll

35 Miss. Admin. Code Pt. 6, R. 100 Rule 100

The Recapitulation of Homestead Exemptions, which is referred to as the supplemental roll, is a legal addition to and part of the land roll of a county or a municipality. It is subject to all laws relating to assessment rolls. It is the duty of the Clerk of the Board of Supervisors to make the supplemental roll for the county and the municipalities.

35 Miss. Admin. Code Pt. 6, R. 101 Rule 101

COUNTY SUPPLEMENTAL ROLL COUNTY SUPPLEMENTAL ROLL The county supplemental roll is required to be submitted to the Department of Revenue office before reimbursement may be made to a county. 1. The supplemental roll is to be made from the approved applications and not from the land roll. The Department of Revenue provides the specifications that are to be used to prepare the supplemental roll. The supplemental roll shall be forwarded to the Department of Revenue, the Tax Collector, and one copy attached to the land roll. If your county has two judicial districts, a fourth copy will be made for the second district. This roll must be certified by the Clerk of the Board of Supervisors in order for it to be considered complete and official. 2. The supplemental roll shall be made as soon as possible after the land roll is made and approved by the Board of Supervisors and the Department of Revenue. All applications should have been allowed or disallowed by the Board of Supervisors.

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Before reimbursement can be made, the supplemental roll, the Certificate of Tax Loss, and all applications must be submitted to the Department of Revenue. In order to receive the reimbursement on time, the supplemental roll must be received by the Department of Revenue no later than December 31 of the current year. Any certificates requesting reimbursement, which are received later than June 1 of the following year, shall not be considered. 3. The information in the supplemental roll is the basis from which homestead exemptions are granted. When completing the supplemental roll, all information must be identical to the information listed on the application. Additional instructions and requirements can be found in the attached Part VI, Appendix 1, titled County Supplemental Roll. The Department of Revenue requires all data fields identified in Part VI, Appendix 1 to be completely and accurately provided. All data will be verified prior to acceptance by the Department of Revenue. 4. While an applicant’s Social Security Number (SSN), Individual Tax Identification Number (ITIN), or Exempt Status must be submitted on the County Supplemental Roll data provided to the Department, these numbers, as well as, the ID Type data and any birth date data must be redacted from all documents of public record retained by the counties.

35 Miss. Admin. Code Pt. 6, R. 102 Rule 102

MUNICIPAL SUPPLEMENTAL ROLL In addition to the county supplemental roll, the municipal supplemental roll must be received by the Department of Revenue before reimbursement may be made to a municipality. The same rules apply to the municipal roll as to the supplemental roll. Additional instructions and requirements can be found in the attached Part VI, Appendix 2, titled Municipal Supplemental Roll. The Department of Revenue requires all data fields identified in Part VI, Appendix 2 to be completely and accurately provided. All data will be verified prior to acceptance by the Department of Revenue. It is the duty of the Clerk of the Board of Supervisors to prepare the municipal roll using the information provided by the Municipal Clerk. 1. The municipal roll is made in the same manner as the supplemental roll. One copy should be delivered to the Department of Revenue, the municipal Tax Collector and the third copy should be placed with the land roll in the Clerk's office. The municipal roll is made from the approved applicants who are over 65 years of age, or who are 100% disabled and whose exemptions cause a municipality a tax loss. 2. The municipal roll is made at the same time as the supplemental roll; however, the municipal roll must be made after the Resolution of the Board sets the tax levy for the municipality. The Municipal Clerk should give the county Clerk of the Board of Supervisors a certified copy of that tax levy in order for him to prepare the municipal roll. 3. While an applicant’s Social Security Number (SSN), Individual Tax Identification Number (ITIN), or Exempt Status must be submitted on the Municipal Supplemental Roll data provided to the Department, these numbers, as well as, the ID Type data and any birth date data must be redacted from all documents of public record retained by the counties.

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35 Miss. Admin. Code Pt. 6, R. 103 Rule 103

AMENDED SUPPLEMENTAL ROLL In some instances it becomes necessary to amend the supplemental roll. The amendment is known as the Petition to adjust exemption on homestead exemption supplemental roll. (Form 72-005) This is the duty of the Tax Collector as set out in Section 27-33-51 (a). This is done in the same manner as the original supplemental roll. A change to the supplemental roll cannot be made without the proper documents to substantiate the change, either valid application or a board order. If the amendment affects an additional exemption that is within a municipality's taxing district, the municipal roll should be amended as well. The additional requirements for the adjustment to the supplemental include the following: 1. Deletions The page titled "Deletions" should be used to list the name, parcel and all other information that should be deleted because of an error. The name, parcel and other information should be listed EXACTLY as it is listed on the original supplemental roll in columns 1 through 14. This form may be used to remove a name from the supplemental roll that did not have an application on file. This form should be submitted in duplicate. One will be returned to you indicating the action of the Tax Commission. 2. Additions A page titled "Additions" should be used to list the correct name, parcel number and other information as it should have appeared. Any names and parcels that were omitted when making the original supplemental roll are to be listed on this page also. These additions should be made in the same manner as if making entries on the original supplemental roll. This form should also be submitted in duplicate. 3. Corrections A page titled "Corrections" may be used to correct the information concerning an applicant whose name appears on the original supplemental roll. This form should be completed in duplicate. 4. Certification a. Any deletion, addition, or correction must be approved by the Board of Supervisors and certified by the Clerk of the Board of Supervisors. b. If this certification is not made, the Tax Commission cannot accept it. 5. When the Tax Commission requests an adjustment to the supplemental roll to correct a problem found during the examination of a taxing unit's original supplemental roll, the adjustment should be sent as soon as possible to correct the problem before a charge is made. The Tax Commission would prefer one supplement made to the taxing unit's original roll instead of several supplements made throughout the year. 6. Deadline a. The deadline for a supplement to the supplemental roll is the last Monday in August of the year following the year in which the homestead exemption application was made. This is the last date that the Board of Supervisors can approve a change to the supplemental roll. The Tax Commission must receive this supplement no later than September 15 of the year following the year in which the supplemental roll is made. b. These rules apply to amending the municipal roll as well.

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c. IMPORTANT IMPORTANT IMPORTANT In order for the Tax Commission to accept any roll or adjustment to any roll, it must meet the following conditions: i. it must be the original ii. it must be completed correctly iii. it must be certified d. If the roll or adjustments does not meet the above listed conditions, the Tax Commission will return it for correction.

35 Miss. Admin. Code Pt. 6, R. 104 (Reserved)

Part VI, Appendix 1

County Supplemental Roll

Sequence NEW Column Name Field Description 1 FEIN County's FEIN 2 Record Type A (Add), C (Change), D (Delete) 3 Filing Year Year to which this Homestead filing relates

Primary Filer ID Type (SSN, ITIN, Exempt) This field should indicate the type of ID Number provided in Primary Filer ID Field. Allowed entries are limited to SSN (Social Security Number), ITIN (Individual Taxpayer Identification Number) or EXEMPT. The ID Type field should be redacted from all documents of public record retained by the counties.

Primary Filer ID (SSN, ITIN, Exempt) The ID Number should be the same ID number submitted by the applicant on his application and must be either a SSN, ITIN or an dummy number identifying the applicant as a member of an EXEMPT class (dummy numbers must be issued by the DOR). The ID number field should be redacted from all documents of public record retained by the counties. 6 Primary Filer Name Primary names are to be in strict alphabetical order with the last name first and then the given name. Applicants are to be separated by the school district(s) of each county. There is to be only one name per line. If an applicant owns more than one parcel, use the same name for each parcel. Do not use ditto marks or any other notation. Do not use any other form of the applicant's name. No estates should be listed. 7 Primary Filer Street The address should be the same address submitted by the applicant on his application. 8 Primary Filer Street2 The address should be the same address submitted by the applicant on his application. 9 Primary Filer City The address should be the same address submitted by the applicant on his application. 10 Primary Filer State The address should be the same address submitted by the applicant on his application. 11 Primary Filer Zip The address should be the same address submitted by the applicant on his application.

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Secondary Filer ID Type (SSN, ITIN, Exempt) This field should indicate the type of ID Number provided in Secondary Filer ID Field. Allowed entries are limited to SSN (Social Security Number), ITIN (Individual Taxpayer Identification Number) or EXEMPT. The ID Type field should be redacted from all documents of public record retained by the counties.

Secondary Filer ID (SSN, ITIN, Exempt) The ID Number should be the same ID number submitted by the applicant on his application and must be either a SSN, ITIN or an dummy number identifying the applicant as a member of an EXEMPT class (dummy numbers must be issued by the DOR). The ID number field should be redacted from all documents of public record retained by the counties. 14 Secondary Filer Name Do not use ditto marks or any other notation. Do not use any other form of the applicant's name. 15 Over 65 Over 65 or Disabled (Y/N) 16 Parcel Number If there is more than one parcel number on the application, each parcel number should be shown on the supplemental roll. Only one parcel number should appear on each line. 17 Number of Acres This column should indicate the number of acres in a parcel located outside a municipality. If the land is located within a municipality, the letter U is used. An applicant may claim a total of one hundred sixty (160) acres for homestead exemption. 18 Land Assessed Value This column should include the full assessed value of all land in the parcel number.

Building Assessed Value Only the full assessed value of all the buildings and improvements located on the parcel is to be included.

Under 65 Allowed Assessed Value The total amount of exempt value that is allowed for taxpayers under 65 years of age or not 100% disabled is to be shown in this column. This is the regular exemption. It is limited to a total of seven thousand five hundred dollars ($7,500) for all parcels.

Disallowed Assessed Value The total amount of assessed value that is not exempted is to be shown here. This would include any amount of assessed value over the total limit of seven thousand five hundred dollars ($7,500) or any assessed property contained in columns 11 & 12 that does not qualify for homestead exemption.

Under 65 Allowed Amount The dollar amount of the exemption allowed to taxpayers under 65 years of age and not 100% disabled, regular exemption, is reflected in this column. Each applicant is allowed an exemption of not more than three hundred dollars ($300). The amount is determined by the table in Miss Code Ann Section 27-33-75.

Over 65 Allowed Amount The total amount of exempt value allowed for taxpayers over the age of 65 or who are 100% disabled should be indicated in this column. This is the additional exemption. This exemption is also limited to seven thousand five hundred dollars ($7,500). 24 MS County Code The county code of the county in which the parcel is located should be indicated in this column. 25 Municipality If the parcel is located within a municipality's taxing district, indicate the municipality's code in this column. 26 School District The school district in which the parcel is located should be indicated in this column.

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Part VI, Appendix 2 Municipal Supplemental Roll

Sequence NEW Column Name Field Description 1 FEIN County's FEIN 2 Record Type A (Add), C (Change), D (Delete) 3 Filing Year Year to which this Homestead filing relates

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35 Miss. Admin. Code Pt. 6, R. 16 Rule 16

Land Assessed Value This column should include the full assessed value of all land in the parcel number.

Building Assessed Value Only the full assessed value of all the buildings and improvements located on the parcel is to be included.

Allowed Assessed Value Amount of assessed value exempted.

Disallowed Assessed Value Amount of assessed value, if any, that exceeds the Allowed Assessed Value. 20 Levy This field should be populated with the municipality's millage rate. 21 Tax Loss Equals the Allowed Assessed Value multiplied by the Levy.

Over 65 Disabled Allowed Includes the actual tax loss suffered by the municipality that will be considered for reimbursement by the Department of Revenue. There is a limit of two hundred dollars ($200) per applicant.

Over 65 Disabled Disallowed Includes, if any, the amount of tax loss suffered by the municipality that is NOT considered for reimbursement by the Department of Revenue. This field should equal the amount of exempted taxes exceeding the two hundred dollars ($200) per applicant limit. 24 County Code The county code of the county in which the parcel is located should be indicated in this column. 25 Municipality The municipality code of the municipality in which the parcel is located should be indicated in this column.

Chapter 08 Applications

35 Miss. Admin. Code Pt. 6, R. 100 Rule 100

This is the most important homestead exemption document. This document contains the information that determines the eligibility of the applicant, the property, and the amount of eligible exemption. The following guidelines will help to prepare the applications. THE SAME INFORMATION ON THE APPLICATION MUST BE SHOWN ON THE SUPPLEMENTAL ROLL. This includes the same name and exactly the same parcel number.

35 Miss. Admin. Code Pt. 6, R. 101 Rule 101

WHERE AND WHEN FILED There are definite laws governing the time and place in which one files for homestead exemption. 1. Where The application must be filed with the Tax Assessor of the county in which the property is located. If the applicant is filing on property that lies in two counties, he must first file in the county in which the residence is found. The applicant must then have two (2) certified copies of that application showing the assessed value of both the land and the buildings and the total assessed value allowed. The applicant should take the applications to the Tax Assessor's office in the adjoining county where the additional property is located. The certified copies of the resident county must be ATTACHED to the application of the adjoining county. One copy is to be sent with the original (not attached) that is sent to the Tax Commission. The other copy is to be attached to the copy that is kept on file in the Chancery Clerk's office.

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The limit of seven thousand five hundred dollars ($7,500) and one hundred sixty (160) acres must be considered on the combined values of both counties. 2. When The application must be filed between January 1 and April 1 in the year the homestead exemption is being sought. If the deadline has passed, there is no recourse to file a late application. If a courthouse has been destroyed, the Governor may extend the deadline an additional thirty (30) days. 3. Completeness a. Every question on the application is important and is to be completed truthfully, correctly, and legibly. Please type the information on the application. If the application is not complete, determination of eligibility cannot be made. The information contained on the long form application includes the following items listed by line number. b. The heading on the application contains information that is just as important as the questions within the application. The county number must be given. The year in which the application is filed is typed in the center of the application next to the county number. i. This line is for the applicant's full name and social security number. If the applicant lives within a municipality, the numerical code for the municipality should be given. If the applicant does not live inside a municipality, 000 is used for the county code. ii. This line is for applicant's spouse. If the applicant is married, the name of the spouse is required. (The homestead application has no bearing on the ownership of property). Please also give the social security number of the spouse. If social security number of either the applicant or applicant's spouse begins with zero (0), print the zero (0). If the "name of spouse" field is blank, do not print zeros for the social security number. Leave the social security number blank. The numerical code for the school district should be given. iii. This line is for the address of the property on which homestead exemption is being sought, not the mailing address. iv. This line indicates whether the applicant is to receive regular or an additional exemption. The date of birth for applicants over 65 of age is located on line 2 in this area. v. This line asks for the marital status. Unless an applicant's marital status is shown, it is impossible to determine his eligibility. For instance, the provisions for the eligibility of a separated person are much more limited than those for a married or single person. Also, a single person, in some cases, does not have to occupy the dwelling as a residence. Marital status can change. For this reason, continuing knowledge of the marital status is important. vi. This line gives us the title information. vii. This line shows the use of the property. If "2" or "3" is marked for business activity, the applicant must complete this question. The determination of eligibility must be made upon the answers. Print a "1" in this area if no business activity.

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viii. If an applicant is filing in an adjoining county, the two (2) digit county number is to be listed on this line. If there is no adjoining county, print two zeros (00) on this line. ix. This line shows the parcel number, the number of acres in the parcel, the date of acquisition, and the deed book and page of recording. This line also indicates whether or not the property is in the city limits. If more than one parcel is owned, please indicate if this additional property joins the home or is within five (5) miles of the home. Please be aware of the two limits: 1. One hundred sixty (160) acre maximum, and 2. Four (4) disjoined tracts. If some or all of the property lies inside a municipality, it all must join or the property is ineligible. x. This line gives the name and location of all joint owners of the homestead property. All joint owners should be listed. xi. This question asks how the property was acquired. Either a or b must be completed. A is used if property was inherited. B is used if the property was acquired by other means. The mortgage information is used to determine that one-fourth (1/4) of the purchase price was paid or provision has been made for the annual payment of interest at the normal rate. Please explain that refusal may cause the application to be denied. xii. This is a statement concerning compliance with income tax laws and road and bridge privilege tax laws by the applicant. The car tag numbers are to be listed. The eligibility of the applicant may be determined by the county and state in which the vehicle is tagged. If the applicant does not own a vehicle, please mark the space provided.

35 Miss. Admin. Code Pt. 6, R. 102 Rule 102

OATH AND SIGNATURES 1. Both the signature of the applicant and the signature of the Tax Assessor or his deputy are needed to make the application valid. The application for homestead exemption is an affidavit He (the applicant) is required to take a solemn oath to that effect. It is further required that this oath be administered only by officials who are authorized by law to take such oaths. When the applicant's name or mark appears in the signature space on the application, he assumes full responsibility for the content of the application and its truthfulness. The authenticity of the signature mark is the responsibility of the officer that acknowledges the application. This office must state on the application over his signature and official position that (1) the application was sworn as to being true and correct and (2) was signed in his presence by the applicant on a certain date. A person making his mark is a valid signature when acknowledged by the officer. 2. A husband and wife may sign for the other. A person holding power of attorney may sign for the applicant; however, proof of such must be attached to his application each year. THE TAX ASSESSOR OR HIS DEPUTY MAY NOT SIGN FOR ANY APPLICANT UNLESS VESTED WITH POWER OF ATTORNEY. Form 72-002, Power of Attorney, can be used strictly for homestead exemption purposes. Once this form is completed, a copy may be attached to the current application.

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35 Miss. Admin. Code Pt. 6, R. 103 Rule 103

NEW APPLICATIONS 1. New applications are used when filing for the first time. These applications contain detailed information needed to determine the eligibility of the applicant. A new application is used in the following circumstances: a. amending an existing application except as described in Title 35 of the Mississippi Administrative Code, Part VI, Subpart 2, Chapter 8. b. changing property description c. changing property use d. changing property ownership e. changing marital status f. qualifying for the additional exemption g. filing in adjoining counties-certified copies h. death of joint applicant except as described in Title 35 of the Mississippi Administrative Code, Part VI, Subpart 2, Chapter 8. 2. If a new application is used to file for any reason other than the first time filing, state on the application the reason for using a new application. Whatever the reason for filing a new application, both the signature of the applicant and the signature of the Tax Assessor or his deputy along with the date are necessary.

35 Miss. Admin. Code Pt. 6, R. 104 Rule 104

AMENDED APPLICATIONS If an applicant fails to disclose the fact that he is eligible for additional exemption, an amended application should be filed. Amended applications should be sent to the Tax Commission under a separate cover from the original applications. 1. How A new application is used to file an amended application with the word "AMENDED" clearly marked across the top of the application and the reason for the amendment written on the application. When amending an existing application, line 1 through 9 must be completed. The original signatures of both the Tax Assessor and the applicant should also be on that application. 2. When to An amended application can only be used if an applicant fails to disclose eligibility for an additional exemption A copy of the proof of the exemption should be attached to the amended application. This must be approved by the Board of Supervisors no later than the last Monday in August of the year following the year the supplemental roll was approved. 3. Deadline An amended application may be filed no later than the last Monday in August of the year following the year in which the original application was filed. This is also the deadline for submission of a petition to adjust exemption on the supplemental roll. Any petition to adjust the supplemental roll must be received by the Tax Commission no later than September 15 of the year following the year in which the Supplemental roll is made. Any Petitions received after that date shall not be accepted. If an amended application is made, then a petition to the supplemental roll should be made reflecting the change. THE INFORMATION ON THE APPLICATION MUST BE THE SAME AS ON THE SUPPLEMENTAL ROLL. a. Correcting an existing application

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A typographical or clerical error may be corrected by using form 72-003, Correction/Deletion of the Homestead Application. "Correction" should be marked. The account number, county name, and year of application should be completed. The name of the applicant and the social security number should be shown as they appear on the application. Only the items that are to be corrected should be completed on the lines below applicant's name. i. If eligible property failed to be listed on the application due to clerical error, the application may be amended and corrected by using a Form 72-003. This correction must be made by the last Monday in August of the year following the roll year. ii. If the applicant fails to remove a parcel that was sold or ineligible, or the applicant’s parcel number changed, the application may be amended and corrected by using a Form 72-003. These corrections must be made on or before June 1 st of that roll year. iii. If the surviving spouse of a dead applicant does not file a new application, the application may be amended and corrected by removing the dead spouse’s name and adding the surviving spouse’s birth date by using a Form 72-003. If the surviving spouse is not eligible for the same exemption as the dead spouse, a new application must be filed. b. Changes in initial application Any changes in property description, ownership, use or occupancy except as described above require that a new application be filed during the next filing period. An amended application is not acceptable. This requires all questions to be answered as if this were the first application ever filed. c. Filing in adjoining counties If an applicant is filing in adjoining counties, then the certified copy of the resident county should be a new application. There should be two (2) copies of this application with the assessed value of the land and the dwelling and the total assessed value allowed in the resident county written on the application. Only questions 1-9 and 11 need to be answered.

35 Miss. Admin. Code Pt. 6, R. 105 Rule 105

LOST APPLICATION In cases where a person claims to have filed an application for homestead exemption within the time prescribed by law and does not have his blue copy of the application and a copy cannot be found in the county office or the Tax Commission office, there is no remedy. An application does not exist for that year. If the person does have his blue copy of the application and it is signed and dated by the Tax Assessors and is eligible in all other areas, then the applicant may use that copy as a replacement for the lost original application. The Tax Assessor shall accept this copy and shall certify that it is a valid copy. The deadline to accept the blue copy from the applicant is March 31 of the year following the year in which the application was filed. If an applicant produces his blue copy after that date, the Tax Assessor may not accept it. The Clerk of the Board of Supervisors should make a copy of the applicant's blue copy and certify it as a valid copy and send it to the Tax Commission. The Tax Collector shall make a petition to adjust exemption to the supplemental roll adding the applicant. The Board of Supervisors must approve the copy of the application.

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35 Miss. Admin. Code Pt. 6, R. 106 Rule 106

SENT TO TAX COMMISSION The completed applications that are filed should be sent to the Clerk of the Board of Supervisors on the first day of the month following the month in which they were filed. The Clerk of the Board of Supervisors is to send all the applications to the Tax Commission no later than June 1. All applications should be sent at one time. The law requires the Tax Commission to reject the reimbursement of tax loss any exemption granted by the Board of Supervisors for which no application has been sent in this manner. In order for the tax Commission to process the applications, the following guidelines shall be followed. 1. Applications should be alphabetized. 2. Applications should not be folded or mutilated in any way. 3. Do not place applications in binders. 4. If any attachment is made to an application, it should be in a separate bundle to the applications. 5. Enclose a letter stating total number of applications sent to the Tax Commission office.

35 Miss. Admin. Code Pt. 6, R. 107 (Reserved)

Chapter 09 Officials

35 Miss. Admin. Code Pt. 6, R. 100 Rule 100

Each governmental official's duties in the administration of the homestead exemption law are explained in the statute. This is a brief synopsis of those duties.

35 Miss. Admin. Code Pt. 6, R. 101 Rule 101

TAX ASSESSOR - Section 27-33-33 All claims for homestead exemption must first come to the Tax Assessor. The Tax Assessor should exercise the greatest of care in order that the claim may conform to the requirements of the law in this initial step. 1. Assess homestead separately The first important duty of the Tax Assessor is to require that all land and buildings be separately assessed on the land roll and supplemental roll. The Tax Assessor shall prepare proper notice to the Board of Supervisors requesting any changes that need to be made to the roll. The Tax Assessor shall also inspect new dwellings and recommend to the Board of Supervisors the value at which the dwellings should be assessed. The Tax Assessor shall assess all properties, homestead or non- homestead, in a fair and uniform way. 2. Applications The Tax Assessor must keep a supply of blank homestead exemption forms for the public. He shall carefully examine all applications before he accepts them. He must require each application to be complete. If the application is not complete, it is the duty of the Tax Assessor to return it to the applicant and require him to complete it. He shall require that the applications be made in quadruplicate. He shall assist the applicant if necessary. 3. Accuracy

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If the Tax Assessor believes any statements made on the application are not true, he should report it to the Board of Supervisors. He should suggest that the applicant make any correction needed; however, he cannot make the correction himself without the applicant's approval. 4. Property executed The Tax Assessor shall examine the application and if it is complete, he shall sign it and date it and return to the taxpayer his blue copy. Unless an application is properly executed, the Tax Assessor shall also give any information or recommendation to the Board of Supervisors as it concerns the eligibility of homestead exemptions. 5. Accept applications It is the duty of the Tax Assessor to accept all applications from January 1 through April 1, both dates inclusive. The applicant who does not file his application during this period forfeits all his homestead exemption rights for that year. The Tax Assessor does not have the authority to disallow an exemption; however, the assessor may refuse an application if it is not complete. The Tax Assessor can express his opinion as to the eligibility of an applicant, but must accept the application if the applicant chooses to file one. 6. Deliver applications On the first day of each month, the Tax Assessor is to deliver to the Clerk all applications which were filed with him during the preceding month. All applications must be given to the Clerk by May 1 of each year. This allows the Tax Assessor time to inspect all applications while they are in his possession. If a problem is found, he may request the applicant to make the necessary corrections. The Tax Assessor is also allowed time to verify parcel numbers, etc. with the land roll. 7. Assist the Board The law requires the Tax Assessor to attend all Board meetings when any homestead exemption matter is being considered. He shall give any assistance in these matters that the Board of Supervisors may require. He shall also file with the Board of Supervisors, at each monthly meeting, notices of any errors in an application already filed, or of any corrections needed on the land roll or supplemental roll. The Tax Assessor shall also give any information or recommendation to the Board of Supervisors concerning the eligibility of an applicant. 8. Delete List Prepared by the Tax Assessor and approved by the Board of Supervisors. This must be delivered to the Tax Commission no later than December 31 each year.

35 Miss. Admin. Code Pt. 6, R. 102 Rule 102

CLERK OF THE BOARD OF SUPERVISORS - Section 27-33-35 The Clerk of the Board of Supervisors is to keep all documents relating to homestead exemption that come before the Board of Supervisors. In Addition to his regular duties, he shall perform the following: 1. Accept applications

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From February 1 until May 1, the Clerk shall accept all applications for homestead exemption delivered to him by the Tax Assessor. 2. Deliver applications The Clerk is required to deliver to the Tax Commission on or before June 1, the original of all applications received by him. The applications should be alphabetized. 3. Board of Supervisors The Clerk shall present to the Board of Supervisors on the first day of its regular monthly meeting, the duplicate of all applications filed with him by the Tax Assessor. The Clerk shall perform any duty that the Board of Supervisors may delegate to him. 4. Applications on File The Clerk shall keep the applications on file in alphabetical order for a period of three (3) years. The applications are a matter of public record. 5. Prepare supplemental roll Immediately after the land roll has been approved by the Tax Commission and the Board of Supervisors, the Clerk shall prepare on forms provided by the Tax Commission, in triplicate, the Recapitulation of the Homestead Exemptions (supplemental roll) for any taxing unit in his county. This includes municipal supplemental rolls. Each of these copies must be certified by the Clerk as to its correctness, completeness, and truthfulness. The ORIGINAL of the supplemental roll shall be sent to the Tax Commission. One copy shall be delivered to the Tax Collector. The other copy shall be placed in the land roll in the Clerk's office. This supplemental roll shall contain all homestead exemption applications granted by the Board of Supervisors and shall be made from the applications and not from the land roll. 6. Tax loss certificate No later than December 31 shall the Clerk prepare the Certificate of Tax Loss for all taxing units in his county, including the municipalities. These certificates shall be made in triplicate, on the forms provided by the Tax Commission. Each copy shall bear his certification. He shall, no later than December 31 each year, deliver the original copy of these certificates to the Tax Commission, deliver the duplicate to the Tax Collector, and retain the third copy in his file as public record. The Certificate of Tax Loss must reflect the information on the supplemental roll. Certificates received later than June 1 of the following year shall not be considered for reimbursement by the Tax Commission. 7. Municipalities Only the county has the authority to allow or disallow exemptions. It is the duty of the Clerk of the Board of Supervisors to certify the forms for the municipalities. It is also the duty of the Clerk of the Board of Supervisors to certify the forms for the municipalities. It is also the duty of the Clerk of the Board of Supervisors to send the ORIGINAL of these completed forms to the Tax Commission in the same manner as the county forms and send the duplicates to the Municipal Clerk.

35 Miss. Admin. Code Pt. 6, R. 103 BOARD OF SUPERVISORS - Section 27-33-37

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With the exception of the Tax Commission, only the county Board of Supervisors has the authority to allow or disallow applications. Some duties concerning that authority are outlined below. 1. Examine applications The most important duty requires the Board of Supervisors to examine each application that has been delivered by the Clerk. This examination is to be done each month. Applications should be allowed, disallowed or held for further examination. 2. Rule on eligibility It is the duty of the Board of Supervisors to allow or disallow all applications by the August board meeting. The Board of Supervisors should disallow all applications that do not conform to the requirements of the law. Notice in writing by mail must be given to applicants disallowed by the Board. Notice in writing by mail must also be given by the Board to applicants disallowed by the Tax Commission. 3. Have errors corrected If the Board discovers an error in an application or is made aware of eligibility for additional exemption, it should give notice to the applicant and ask that the necessary corrections be made by the applicant. If the error is found before the April 1 deadline, a new application should be filed. If the error is found after the April 1 deadline, an amended application is made. No correction can be made on homestead applications after final action by the Board. Final correction of the supplemental roll must be approved by the Board no later than the last Monday in August of the year following the year in which the supplemental roll was made. This correction must be received by the Tax Commission no later than September 15 of the year following the year which the roll is made. 4. Approve rolls The Board of Supervisors approves the supplemental roll for the current year after all applications have been allowed or disallowed. The action of the Board approving the supplemental roll must be made of minute record. This supplemental roll becomes a part of the regular land roll and requires the same procedure to make it official. Any corrections to that supplemental roll must be in the State Tax Commission office no later than September 15 of the year following the year in which the supplemental roll was made. Any changes to the roll must be recorded in the minutes of the Board of Supervisors. 5. Tax Commission charges The Board of Supervisors should respond to a Tax Commission charge by accepting or objecting to the charge. If the Board objects to a charge, a written statement of objection must be included. Three copies of the charge are sent to the Chancery Clerk. The white copy will become a county record. The blue copy should be mailed to the applicant. The pink copy should be returned to the Tax Commission with acceptance or objection indicated on the copy. The findings of the Tax Commission are final and must be recorded in the minutes of the Board of Supervisors. 6. Additional taxes

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The Board of Supervisors shall order the Tax Collector to collect any additional taxes due as a result of a homestead exemption disallowed by the Tax Commission after being allowed by the Board. 7. Employ necessary assistance The Board of Supervisors may employ the Clerk of the Board of Supervisors to perform any of the duties they deem necessary.

35 Miss. Admin. Code Pt. 6, R. 104 Rule 104

TAX COMMISSION - Section 27-33-41 The Tax Commission has duties to perform in connection with homestead exemption. 1. Rules and regulations The Tax Commission shall adopt rules to aid administration of the homestead exemption law. 2. Forms The Tax Commission is to furnish and prescribe all forms needed in the administration of homestead exemption law. 3. Examination The law requires the Tax Commission to examine all documents concerning homestead exemption. This duty must be performed in order to determine the eligibility of any property or any person claiming homestead exemption. It is also the duty of the Tax Commission to examine all tax loss claims made by any taxing unit. This duty must be performed to determine that claims are made within the requirements of the law. 4. Errors The Tax Commission shall correct or have corrected any error found during the examination of a document. Notice to the taxing unit of the correction needed shall be given in writing. 5. Adjustments The Tax Commission shall reject for reimbursement of tax loss any exemption allowed by the Board of Supervisors which does not conform to the statute or for which an application is not in the Tax Commission office. Notice of such adjustment shall be made to the Board of Supervisors as a charge in writing. The Board of Supervisors shall have the opportunity to object to any charge made by the Tax Commission; however, the final decision is made by the Tax Commission. 6. Reimbursement The Tax Commission shall reimburse the taxing unit for each approved applicant. This reimbursement shall be made in two installments, one in March and one in September, provided all requirements are met by the taxing unit. The Tax Commission shall certify to the State Auditor the amount of reimbursement for each taxing unit.

35 Miss. Admin. Code Pt. 6, R. 105 Rule 105

STATE AUDITOR - Section 27-33-45 The State Auditor shall issue warrants in the amount requested by the Tax Commission for each taxing unit.

35 Miss. Admin. Code Pt. 6, R. 106 STATE TREASURER - Section 27-33-47

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The State Treasurer shall pay the warrants from money appropriated for the purpose of homestead exemptions.

35 Miss. Admin. Code Pt. 6, R. 107 Rule 107

STATE ATTORNEY GENERAL - Section 27-33-49 The State Attorney General will issue opinions clarifying issues in the homestead exemption law. This opinion will be the guideline used by the Tax Commission in resolving any problem relating to the opinion. If there are two opposing opinions issued, the most current opinion will be the one followed.

35 Miss. Admin. Code Pt. 6, R. 108 Rule 108

TAX COLLECTOR - Section 27-33-51 The land roll and the tax levy constitute an official order to the Tax Collector to collect ad valorem taxes from each real property owner. The supplemental roll and the tax levy constitute an official order to the Tax Collector that a portion of the ad valorem taxes are not to be collected from property owners. 1. Correct the supplemental roll Occasionally, it becomes necessary to make changes to the county and/or municipal supplemental roll. These changes can be ordered only by the Board of Supervisors upon receipt of a request from the Tax Assessor, or a notice from the Tax Commission for a change in the supplemental roll. These changes shall be listed on the Petition to Adjust Exemption to county or municipal supplemental roll and shall be prepared as required in Rule 7 - Supplemental Roll. (Forms 72-005 and 72-006) The law requires the Tax Collector to make these changes in the supplemental roll and to collect taxes in accordance with the roll as changed. 2. Collect additional taxes Any taxes due as a result of any change ordered in the supplemental roll must be collected by the Tax Collector. This additional tax must be collected on or before February 1 of the year following the year in which the notice to do so is issued. If the property owner does not pay the taxes when due, the Tax Collector is required to collect the taxes as in the case of any other delinquent taxes. 3. Issue tax receipt The Tax Collector shall issue a separate tax receipt upon payment of any additional taxes due as a result of any changes made in the supplemental roll. He shall also issue a tax receipt to all taxpayers who have paid their taxes or who do not owe any taxes because of homestead exemption.

35 Miss. Admin. Code Pt. 6, R. 109 Rule 109

MUNICIPAL CLERK Since the repeal of the Municipal Homestead Exemption Law, the Municipal Clerk has no authority to allow or disallow homestead exemptions. This duty has been given to the county. If a municipality wishes to be reimbursed for eligible applicants over 65 years of age or who are 100% disabled that live within the municipality's taxing district, it is the responsibility of the Municipal Clerk to have all documents needed for such reimbursement submitted to the Tax Commission. Until the Municipal Supplemental Roll, the Municipal Certificate of Tax Loss, and the Certified Tax levy is in the Tax Commission office and certified by the county Clerk of the Board of Supervisors, no reimbursement shall be made to that municipality. 1. Municipal supplemental roll

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The Municipal Clerk should be sure that the Municipal Supplemental Roll is prepared on Form 72-043 and sent to the Tax Commission in order for a timely reimbursement to be made. It is the duty of the Clerk of the Board of Supervisors to prepare your roll according to statute. 2. Certificate of tax loss The Municipal Clerk should be sure that the Municipal Certificate of Tax Loss is prepared and sent to the Tax Commission. Again, it is the duty of the Clerk of the Board of Supervisors to prepare this document. 3. Certified tax levy The Municipal Clerk should submit to the Clerk of the Board of Supervisors a certified copy of the Resolution of the Board setting the tax levy in order for the Clerk to complete the Municipal Supplemental Roll. A certificate copy of the tax levy should also be sent to the Tax Commission before reimbursement can be made to a municipality. 4. Applicants Only the county officials have the authority to allow or disallow homestead exemptions. If the Municipal Clerk has any information concerning the eligibility of an applicant, it is his duty to relay that information to the county officials or to the Tax Commission. 5. When a charge is received When an applicant that is listed on the Municipal Supplemental Roll has his exemption disallowed by the Tax Commission, a notice of adjustment or charge is sent to the municipality. Only the county may accept or object to the charge.

35 Miss. Admin. Code Pt. 6, R. 110 Rule 110

PENALTIES 1. If any official knowingly does not comply with the provisions of the Homestead Exemption Law in connection with an allowed exemption of reimbursement deducted because of the disallowance of the fraudulent exemption. If an official approves an exemption he knows to be ineligible, the Tax Commission could reduce the reimbursement by two hundred dollars ($200) instead of the normal one hundred dollars ($100). 2. Any person who assists another to prepare a fraudulent claim for exemption, who executes a fictitious deed or mortgage, who makes a fraudulent claim for exemption, or who makes any false statement on an application is guilty of a misdemeanor and if convicted can be fined not more than five hundred dollars ($500) or be imprisoned for six (6) months.

35 Miss. Admin. Code Pt. 6, R. 111 (Reserved)

Chapter 10 One Time Filers

35 Miss. Admin. Code Pt. 6, R. 100 Rule 100

The Tax Assessor must furnish to the Tax Commission a list of homestead applications to be deleted each year.

35 Miss. Admin. Code Pt. 6, R. 101 Rule 101

This list must be approved by the Board of Supervisors and delivered to the Tax Commission no later than September 15 each year.

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35 Miss. Admin. Code Pt. 6, R. 102 Rule 102

The deletion list may be furnished by using any one of the following methods: 1. A magnetic tape prepared according to Tax Commission specifications. 2. Form 72-003, Correction/Deletion of the Homestead Application, may be completed for each application to be deleted. 3. A computer listing of applicants filing Homestead will be furnished. The assessor's office may highlight the applications to be deleted and return the list to the State Tax Commission. 4. Deletion list must include the name, social security number and parcel number of each applicant to be deleted. 5. Electronic filing (email system) according to required specifications and with Tax commission approval.

35 Miss. Admin. Code Pt. 6, R. 103 Rule 103

The deletion list should include: 1. those applicants who sold property during the previous year and will not appear on the current Homestead Supplemental roll. 2. those applicants who have changed exemption status (Example - Regular in 1994, over 65 in 1995.) 3. those applicants who have had a change in ownership, occupancy, or property description. (A new application should be filed.) 4. those applicants who died in the previous year. (A new application should be filed by the heir/heirs or new owners.)

35 Miss. Admin. Code Pt. 6, R. 104 (Reserved)

Part 7 Motor Vehicles and Title

35 Miss. Admin. Code Pt. 7, R. 100 Rule 100

The Department of Revenue is authorized to discontinue a county’s access to the automated statewide title registration system when there is a misuse or unauthorized access to the system. The Department will allow the county sixty (60) days to correct a compliance issue before the county’s access to the system is discontinued. In the event of a probable security threat, the Department will terminate access to the statewide title registration system immediately, but will only do so after communication with the county office.

35 Miss. Admin. Code Pt. 7, R. 101 (Reserved)

35.VII.1.01 revised effective August 1, 2019

Chapter 02 Motor Vehicle Records Disclosure

35 Miss. Admin. Code Pt. 7, R. 100 Rule 100

Mississippi follows federal statutes with regard to the disclosure of information obtained from motor vehicle records. Please see 18 USC Chapter 123 Section 2721.

35 Miss. Admin. Code Pt. 7, R. 101 Rule 101

Governmental agencies, businesses and others seeking to obtain information from motor vehicle records must complete a Mississippi Motor Vehicle Records Disclosure Form. This form will allow the applicant to designate the use of the information permitted pursuant to this rule. Once the applicant has been approved, the information may be obtained for a fee based on the number and type of records obtained. The cost is set by the Department of Revenue based on the cost to provide, maintain, and access the information required. The request for information should be mailed or faxed to the Department. Certain records may also be accessed through our internet query system. There is an annual fee to use this online system. Request for bulk information related to permitted uses should be submitted in writing to the Department.

35 Miss. Admin. Code Pt. 7, R. 102 Rule 102

The Department may deny access to an applicant if the Department determines that the applicant has previously misused motor vehicle information.

35 Miss. Admin. Code Pt. 7, R. 103 (Reserved)

35.VII.1.02 revised effective August 1, 2019

Subpart 2 Tags and Taxes

Chapter 01 Private Carriers of Property (F-Tag)

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35 Miss. Admin. Code Pt. 7, R. 100 Rule 100

Miss. Code Ann. Section 27-19-11 outlines the rate of privilege tax on carriers of property, including the rates for the farm tag (F-Tag) that is available for approved private carriers of property.

35 Miss. Admin. Code Pt. 7, R. 101 Rule 101

Miss. Code Ann. Section 27-19-3(25) provides that a “private carrier of property” means transporting property on Mississippi highways as one of the following: 1. Any person, or their employee, transporting farm products produced on his own farm, farm supplies, materials, and/or equipment used in the growing or production of his own agricultural products in his own truck. 2. Any person transporting his own fish, including shellfish, in his own truck. 3. Any person, or their employee, transporting unprocessed forest products or timber harvesting equipment, wherein ownership remains the same, in their own truck.

35 Miss. Admin. Code Pt. 7, R. 102 Rule 102

For purposes of this chapter, a forest product shall be considered “unprocessed” until such time as the same has undergone a physical change at the mill. Any change or procedure performed on the product at the mill, which changes the product in any manner, is deemed to be processed. By-products produced from forest products are also considered processed.

35 Miss. Admin. Code Pt. 7, R. 103 Rule 103

The ownership of the product must remain the same from the time the product leaves the forest. If ownership changes, then the product no longer qualifies as a forest product.

35 Miss. Admin. Code Pt. 7, R. 104 Rule 104

If said forest product is transported from one mill to another but is still in exactly the same form as when it was transported from the forest the first time (for example, the product has been in a holding yard); it is still considered to be “unprocessed” and can be transported as a “private carrier of property”, and pay “common and contract carriers of property” privilege tax.

35 Miss. Admin. Code Pt. 7, R. 105 Rule 105

Any person making application for the farm license plate (F-tag) under the above restrictions is required to sign an affidavit attesting to these facts.

35 Miss. Admin. Code Pt. 7, R. 106 (Reserved)

35.VII.2.01 revised effective August 1, 2019

Chapter 02 Rental Vehicle Tag Exemption

35 Miss. Admin. Code Pt. 7, R. 100 Rule 100

Miss. Code Ann. Section 27-51-41, provides an exemption from ad valorem taxation for businesses that rent motor vehicles under rental agreements with a term of not more than thirty (30) continuous days. These businesses must have registered for the Motor Vehicle Rental Tax and have obtained the permit as proof.

35 Miss. Admin. Code Pt. 7, R. 101 Rule 101

Only rental business vehicles are eligible for this exemption. A rental business’s use of a short-term rental motor vehicle are limited to the relocation and maintenance of the motor vehicle and the use of the rental customer. Any other use of an exempted rental vehicle

Page 4 of 26 will be considered a violation of this regulation and will result in the denial of exemption for that motor vehicle.

35 Miss. Admin. Code Pt. 7, R. 102 (Reserved)

35.VII.2.02 revised effective August 1, 2019

Chapter 03 Motor Vehicles Owned by Non-residents

35 Miss. Admin. Code Pt. 7, R. 100 Rule 100

Motor vehicles owned by non-residents that are domiciled or garaged in this State are required to obtain a Mississippi Road and Bridge Privilege License and title. The address shown on the application for title must be the Mississippi address where garaged or domiciled.

35 Miss. Admin. Code Pt. 7, R. 101 (Reserved)

35.VII.2.03 revised effective August 1, 2019

Subpart 3 Registration

Chapter 01 Where to Register Vehicles

35 Miss. Admin. Code Pt. 7, R. 100 Rule 100

Pursuant to Miss. Code Ann. Section 27-19-57, all persons required to pay motor vehicle privilege taxes must register their private or commercial vehicle in the county, city and taxing district where the vehicle is domiciled.

35 Miss. Admin. Code Pt. 7, R. 101 Rule 101

A motor vehicle with a gross vehicle weight (GVW) of 10,000 pounds or less is to be registered at the county tax collector’s office in the county where the vehicle is domiciled or where it is parked overnight. A motor vehicle with a GVW over 10,000 pounds that only travels in Mississippi is registered at the county tax collector’s office in the county where the vehicle is domiciled. A motor vehicle with a GVW over 10,000 pounds that travels across state boundaries must be registered directly with the Department of Revenue.

35 Miss. Admin. Code Pt. 7, R. 102 Rule 102

For purposes of this regulation, “domiciled” means the county, city and taxing district from which a vehicle leaves and to which a vehicle returns, where it comes to rest, where it is garaged, for the majority of the registration year. It is the legal residence of a vehicle.

35 Miss. Admin. Code Pt. 7, R. 103 Rule 103

Vehicles, which are used in business, shall be registered in the county, city and taxing district in which they are domiciled. If a business vehicle remains at the business location when not in use, the vehicle should be registered at the business location. If a business vehicle goes with an employee of the company, the vehicle should be registered where the employee is located. The vehicle is to be registered in the name of the owner but the address should reflect the correct location.

Page 5 of 26 104 (Reserved)

35 Miss. Admin. Code Pt. 7, R. 200 Rule 200

If an owner of a vehicle files homestead exemption at a certain location, he/she is claiming that location as their domicile. Therefore, any vehicles titled in that owner’s name should be registered at the homestead location, unless the vehicle is proven to be domiciled at a different location. Above all else, a vehicle is to be registered in the county, city and taxing district where it is domiciled.

35 Miss. Admin. Code Pt. 7, R. 201 Rule 201

County residents who either own a vehicle or lease a vehicle must register at least one vehicle in the county in which they reside. All other vehicles must be registered in such county unless the vehicles remain on property owned or leased by the owner in another county.

35 Miss. Admin. Code Pt. 7, R. 202 Rule 202

Tax collectors are not to register any vehicle in any county, city and taxing district other than the county, city and taxing district in which the vehicle is domiciled. If a vehicle is found to be registered in the wrong county, city or taxing district, then that vehicle is considered not to have been registered at all and the owner is liable for full annual taxes due in the correct county, city and taxing district plus a 25% penalty with no credit allowed for the incorrect taxes paid.

35 Miss. Admin. Code Pt. 7, R. 203 (Reserved)

35.VII.3.01 revised effective August 1, 2019

Subpart 4 Dealers and Designated Agents

Chapter 01 Wholesale Dealers

35 Miss. Admin. Code Pt. 7, R. 100 Rule 100

Miss. Code Ann. Section 27-19-303(l) defines a wholesale dealer as any business engaged in the selling or exchanging of new or used motor vehicles, or both, strictly on a wholesale basis which is granted a wholesale license at the discretion of the Commissioner. Such wholesale dealer shall be awarded all privileges of a “motor vehicle dealer.” A wholesale dealer shall abide by all provisions and requirements associated with a “motor vehicle dealer,” except for the requirement of the “established place of business” and the requirement to buy, sell or exchange a certain number of motor vehicles per year.

35 Miss. Admin. Code Pt. 7, R. 101 Rule 101

The Department shall only license Mississippi residents as motor vehicle dealers, which includes wholesale dealers. Every licensed dealer, including wholesale dealers, will be a designated agent of the Department. Every licensed dealer, including wholesale dealers, must have a surety bond written by an insurance company qualified to do business in Mississippi in the amount determined by the Department, but in no case will the bond be less than fifteen thousand dollars ($15,000). The permit given to wholesale dealers shall read “Wholesale Only” on the face of the permit.

35 Miss. Admin. Code Pt. 7, R. 102 Wholesale dealers can receive one (1) wholesale dealer tag

Page 6 of 26

35 Miss. Admin. Code Pt. 7, R. 103 Rule 103

Wholesale dealers shall only sell to other licensed motor vehicle dealers. Each sales record must indicate the motor vehicle dealer’s name and permit number. The county tax collector shall not title any vehicle sold to an individual by a wholesale dealer. Under no circumstances is a wholesale dealer to sell to an individual.

35 Miss. Admin. Code Pt. 7, R. 104 Rule 104

When a wholesale dealer purchases a motor vehicle for resale, his name must appear on the title as being one in the chain of ownership.

35 Miss. Admin. Code Pt. 7, R. 105 Rule 105

Wholesale dealers are required to maintain motor vehicle liability insurance providing blanket coverage on vehicles operated on the public streets and highways of this state.

35 Miss. Admin. Code Pt. 7, R. 106 Rule 106

The Commissioner of the Department of Revenue has at his discretion the authority to license wholesale dealers and the authority to revoke such license for any violations of the law or regulation.

35 Miss. Admin. Code Pt. 7, R. 107 (Reserved)

35.VII.04.01 revised effective August 1, 2019

Chapter 02 Automobile Auction Not Defined as Selling Dealer

35 Miss. Admin. Code Pt. 7, R. 100 Rule 100

A title application for a motor vehicle that was purchased by the applicant from a dealer that purchased the vehicle from a licensed automobile auction or other commissioned agent must include the following documentation: 1. If the vehicle is currently titled: The current title properly assigned from the selling dealer to the purchasing dealer, then from the purchasing dealer to the title applicant. 2. If the vehicle has never been titled: The bill of sale from the selling dealer to the purchasing dealer and the bill of sale from the purchasing dealer to the title applicant. The bill of sale from the selling dealer to the purchasing dealer must include the name and address of the seller.

35 Miss. Admin. Code Pt. 7, R. 101 Rule 101

A bill of sale or other transfer form from the automobile auction or commissioned agent to the purchasing dealer is not acceptable supporting documentation for the title application.

35 Miss. Admin. Code Pt. 7, R. 102 (Reserved)

35.VII.4.02 revised effective August 1, 2019

Chapter 03 In-Transit and Temporary Dealer Tags

Page 7 of 26 100 An in-transit tag, pursuant to Miss. Code Ann. Section 27-19-40(1), may be used to operate a motor vehicle on the highways of this state when the vehicle is being moved between motor vehicle dealers and/or automobile auctions for the purpose of sale. The in-transit tag may not be used in place of a dealer tag. The cost of the in-transit tag is two dollars ($2.00) and must be purchased in lots of twenty-five (25). The in-transit tag will be valid for a period of three (3) days. The three-day (3) period begins the day the tag is placed on the vehicle, regardless of the time of day, and ends at midnight of the third day.

35 Miss. Admin. Code Pt. 7, R. 101 Rule 101

A temporary tag, pursuant to Miss. Code Ann. Section 27-19-40(2), may be used to operate a motor vehicle on the highways of this state when the vehicle was sold by a dealer or auction to a nonresident or to a Mississippi resident who may temporarily exit this state before obtaining a Mississippi tag. It is unlawful for a motor vehicle dealer or an employee of a motor vehicle dealer to operate a vehicle in inventory with a temporary tag. The cost of the temporary tag is five dollars ($5.00) and must be purchased in lots of ten (10). The temporary tag will be valid for a period of seven (7) full working days, exclusive of the date of purchase, after the date the motor vehicle is purchased. The seven-day period will not be extended.

35 Miss. Admin. Code Pt. 7, R. 102 Rule 102

A rental company may apply for a temporary tag when they acquire a vehicle from a dealer. The temporary tag will allow the rental company to operate the vehicle on Mississippi highways. The temporary tag is valid for thirty (30) days, not including the date of delivery. Any dealer issuing a temporary tag may charge the requesting rental company a fee of five dollars ($5.00) for the tag.

35 Miss. Admin. Code Pt. 7, R. 103 Rule 103

Any person or business entity lawfully engaging in a peer-to-peer car sharing program under the Peer-to-Peer Car Sharing Program Act will not be considered as a rental company for the purposes of this Chapter.

35 Miss. Admin. Code Pt. 7, R. 104 Rule 104

A temporary tag will not be issued to any person or business entity engaging in a peer-to- peer car sharing program.

35 Miss. Admin. Code Pt. 7, R. 105 Rule 105

These tags must be displayed on the vehicle in the top corner of the driver’s side rear window. The information required on the tag must be completed entirely in permanent, bold, black ink or the fine for misuse will apply. Application for the tags shall be made to the Motor Vehicle Services Bureau of the Department. Payment returned for insufficient funds will result in the loss of the tags for a period of one (1) year.

35 Miss. Admin. Code Pt. 7, R. 106 Rule 106

Any unused in-transit or temporary tags must be surrendered to the Department. The Department will not issue a refund for unused plates returned due to misuse. Only Mississippi tags issued by the Department are valid. Any substitutions will constitute misuse.

35 Miss. Admin. Code Pt. 7, R. 107 (Reserved)

35.VII.4.03 revised effective December 26, 2024

Page 8 of 26

Chapter 04 Submission of Title Applications

35 Miss. Admin. Code Pt. 7, R. 100 Rule 100

Payments must be made electronically by the end of the month for title applications submitted electronically to the Department of Revenue. Payments must be attached to non-electronically submitted title applications. Deviation from this procedure will result in the return of all applications.

35 Miss. Admin. Code Pt. 7, R. 101 Rule 101

Title applications and supporting documents that are returned to the designated agent for failure to furnish information or documents must be resubmitted to the Department of Revenue within thirty (30) days of the date shown on the Additional Information Request letter.

35 Miss. Admin. Code Pt. 7, R. 102 (Reserved)

35.VII.4.04 revised effective August 1, 2019

Chapter 05 Misuse of Dealer Permit

35 Miss. Admin. Code Pt. 7, R. 100 Rule 100

A dealer will be required to provide justification for the number of dealer tags, also known as distinguishing number tags, they request when the number of tags exceeds the number of full-time employees of the dealership. “Full-time employee” shall mean an employee that works a minimum of thirty-five (35) hours per week and receives monetary compensation for such hours. Proof of such employment may be required when questioning the use of a dealer tag. Such proof may be, but is not limited to, a copy of the employee’s Form W-2, time sheet, or Mississippi Employment Security Commission (MESC) UI-3 form.

35 Miss. Admin. Code Pt. 7, R. 101 Rule 101

The proper use of dealer tags will be strictly enforced. Dealers will be periodically required to verify to the Commissioner or his agents that dealer tags are being used properly. Such verification will be furnished at the dealer’s business location. The dealer will provide clear evidence that the dealer tags are being used in accordance with this regulation.

35 Miss. Admin. Code Pt. 7, R. 102 Rule 102

The following are not proper uses of a dealer tag: 1. Use by family members of the dealer or employees of the dealership who are not full-time employees; 2. Use by owners, directors, stockholders or partners of the dealership who are not full-time employees of the dealership; 3. Use by receivers, trustees, administrators, executors, guardians, or other persons appointed by or acting under any judgment or order of any court, whether state or federal;

Page 9 of 26 4. Use by public officials, including state, county, or municipal employees, while performing their official duties or commuting to or from the locations where they perform their official duties; 5. Commuting to and/or from school by a full-time student or teacher or commuting by anyone to or from any other employment not directly associated with the dealership. This includes other businesses owned by the owner of the dealership or other employment of the full-time employees of the dealership; 6. Use of a dealer tag on a vehicle that is not for sale by the dealer, or use of a dealer tag on a vehicle that is titled to the dealer or a full-time employee of the dealership. This includes any vehicle in inventory that is used for, service vehicles, tow trucks, wreckers, flatbeds, or courtesy vans; 7. Non-educational use of those tags assigned to schools for driver education purposes; 8. Use by persons having their vehicles repaired by the dealership if the “loaner” vehicle does not contain the required statement from the dealer or if the use exceeds the ten (10) days; and 9. Non-business use, except when operated by the owner of the dealership or full-time dealership personnel, on a vehicle in inventory and available for sale.

35 Miss. Admin. Code Pt. 7, R. 103 Misuse of dealer tags may result in the forfeiture of such tags

35 Miss. Admin. Code Pt. 7, R. 104 Rule 104

Failure to adhere to any of the provisions of this regulation may result in the revocation of the Motor Vehicle Dealer Permit.

35 Miss. Admin. Code Pt. 7, R. 105 (Reserved)

35.VII.4.05 revised effective August 1, 2019

Chapter 06 Revocation of Designated Agent Authority

35 Miss. Admin. Code Pt. 7, R. 100 Rule 100

The Commissioner may revoke the designated agent status of a designated agent when the designated agent fails to faithfully perform those duties imposed by Motor Vehicle Dealer Tag Permit Law or for other good cause, after giving the designated agent written notice of the intention of the Commissioner to revoke said status. Upon revocation of the designated agent status, the designated agent shall surrender all titling materials immediately.

35 Miss. Admin. Code Pt. 7, R. 101 Rule 101

Miss. Code Ann. Section 63-21-13 provides that a motor vehicle dealer shall be a designated agent. Thus, if the motor vehicle dealer’s designated agent status is revoked for cause, the dealer permit is likewise revoked. Upon the revocation of designated agent status and dealer permit, the dealer shall surrender the dealer permit, all dealer tags and all titling materials immediately.

35 Miss. Admin. Code Pt. 7, R. 102 (Reserved)

Page 10 of 26 35.VII.4.06 revised effective August 1, 2019

Subpart 5 Certificate of Title Chapter 01 Title Applications

35 Miss. Admin. Code Pt. 7, R. 100 Rule 100

All applications for a certificate of title for year models 1970 and later must be accompanied by the manufacturer’s certificate of origin, formerly known as the manufacturer’s statement of origin, or the certificate of title unless the vehicle comes from a non-title state. The manufacturer’s certificate of origin from the selling dealer will be required with an application for a new vehicle purchased in a non-title state. The application for a used vehicle purchased in a non-title state must be supported by proper bills of sale and the last out-of-state registration or tag receipts.

35 Miss. Admin. Code Pt. 7, R. 101 Rule 101

For a used vehicle that has not been previously titled and was manufactured or assembled before 1970, an application for a certificate of title must include the following supporting documentation: 1. Current bill of sale; and 2. Previous bill of sale or two (2) tag and tax receipts of the previous owner.

35 Miss. Admin. Code Pt. 7, R. 102 Rule 102

For a vehicle that is at least thirty (30) years old and lacking proper documentation, an application for a certificate of title may be accompanied by an Affidavit of Ownership.

35 Miss. Admin. Code Pt. 7, R. 103 Rule 103

When a motor vehicle enters this state from a title state and application is made for a Mississippi certificate of title, the original out-of-state title or transferable duplicate (replacement) title, properly assigned, must be provided. An affidavit of lost title that is used in some states, will not be accepted in lieu of the above.

35 Miss. Admin. Code Pt. 7, R. 104 Rule 104

When the current bill of sale or manufacturer’s certificate of origin indicates two (2) buyers or current owners, both names and signatures must be included on the title application.

35 Miss. Admin. Code Pt. 7, R. 105 Rule 105

If the current bill of sale or manufacturer’s certificate of origin shows only one (1) owner and said owner desires to include an additional owner on the title, both names and signatures must be included on the title application.

35 Miss. Admin. Code Pt. 7, R. 106 Rule 106

When submitting an application for certificate of title for a new motor vehicle, a manufacturer’s certificate of origin, which warrants title assignment to the vendee, is sufficient to serve as a bill of sale.

35 Miss. Admin. Code Pt. 7, R. 107 Rule 107

A security interest is perfected when the owner signs a security agreement describing the vehicle, and an application for a certificate of title signed by the owner is presented to a designated agent. Upon submission of said application to the Department, any lien date will be recorded as shown thereon.

Page 11 of 26

35 Miss. Admin. Code Pt. 7, R. 108 Rule 108

When a substitution of collateral document is executed by the lienholder for the purpose of titling the subject vehicle, this document may accompany a properly completed application for title and the required supporting documents under the title procedures. The lien date must reflect the date of the original security agreement.

35 Miss. Admin. Code Pt. 7, R. 109 Rule 109

The certificate of title application is required to be signed by the buyer of the vehicle and the designated agent. The applicant (buyer) will be provided a duplicate copy of the application for a certificate of title. This copy will serve as a permit for the operation of the motor vehicle described in the application until the Department either issues the certificate of title or refuses to issue the certificate of title.

35 Miss. Admin. Code Pt. 7, R. 110 Rule 110

Any lienholder with a federal Employer Identification Number (EIN) must electronically transmit the satisfaction and release and discharge of a lien on a motor vehicle to the Department no later than fourteen (14) days after the date of satisfaction of the lien. Any lienholder that knowingly and willfully fails comply with this section shall be subject to a penalty of up to two hundred fifty dollars ($250.00) per violation and shall be liable for any attorney’s fees, legal fees, and/or other fees and costs incurred in any action necessary to discharge and/or release a lien or otherwise affecting a lien for which the lienholder failed to transmit the required information.

35 Miss. Admin. Code Pt. 7, R. 111 Rule 111

If a lien on a motor vehicle is older than eight (8) years from the date the lien was placed on the motor vehicle, the lien shall be recorded by the Department in the automated statewide motor vehicle registration system as having been satisfied and released and discharged, unless annually recertified by the lienholder by utilizing the Department’s Motor Vehicles e-Servies system.

35 Miss. Admin. Code Pt. 7, R. 112 (Reserved)

35.VII.5.01 revised effective September 4, 2025

Chapter 02 Owner Information

35 Miss. Admin. Code Pt. 7, R. 100 Rule 100

The names of the owner on the title application, certificate of title, and Mississippi Road and Bridge Tax Receipt (registration) must be the same on any motor vehicle required to be titled in this State, excluding leased vehicles.

35 Miss. Admin. Code Pt. 7, R. 101 Rule 101

Many motor vehicle title applicants reside in areas adjacent to states bordering Mississippi and possess only out-of-state mailing addresses. When such a person makes application for title, the correct out-of-state address will be shown on the title application.

35 Miss. Admin. Code Pt. 7, R. 102 Rule 102

When a natural person carries on business as a sole proprietor, it is required in both the title application and in the certificate of title, that the name of the owner be stated as the name of the individual natural person, whether or not the trade name is added. The use of the trade name alone in the title application and in the certificate of title, without the

Page 12 of 26 name of the individual who owns the business, does not comply with the requirements of the Mississippi Motor Vehicle Title Act. The burden is put on the lender or conditional seller to find out whether the business name of his customer represents a corporation, partnership, association, or natural person.

35 Miss. Admin. Code Pt. 7, R. 103 Rule 103

The Department of Revenue may use abbreviations for names and/or addresses.

35 Miss. Admin. Code Pt. 7, R. 104 (Reserved)

35 Miss. Admin. Code Pt. 7, R. 200 Rule 200

Where ownership is a joint tenancy with right of survivorship, the owners’ names on the title shall be shown as follows: JOHN DOE AND/OR JOE DOE. To transfer ownership of the vehicle or to encumber the vehicle, both signatures are required, if both are living; if one of the parties is deceased, satisfactory proof of the death of the deceased and signature of the survivor is required.

35 Miss. Admin. Code Pt. 7, R. 201 Rule 201

Where ownership is a tenancy in common, the owners’ names on the title shall be shown as follows: JOHN DOE AND JOE DOE. To transfer ownership of the vehicle or to encumber the vehicle both signatures are required, if both are living; if one of the parties is deceased, probate proceedings are required. Where there has been no admission on the estate of the deceased vehicle owner, the Affidavit Where the Owner Dies Without a Will is required.

35 Miss. Admin. Code Pt. 7, R. 202 Rule 202

Where ownership is a joint tenancy with an expressed intent that either of the owners have full authority to transfer ownership of the vehicle or to encumber the same, the owners’ names on the title shall be shown as follows: JOHN DOE OR JOE DOE.

35 Miss. Admin. Code Pt. 7, R. 203 Rule 203

A certificate of title will not be issued with more than two (2) owners’ names and one (1) address. In the event there are more than two (2) owners, the owners must determine the names that will appear on the certificate of title.

35 Miss. Admin. Code Pt. 7, R. 204 (Reserved)

35.VII.5.02 revised effective August 1, 2019

Chapter 03 Attachments

35 Miss. Admin. Code Pt. 7, R. 100 Rule 100

When a motor vehicle is titled, attachments that can be removed from the vehicle such as a dump body, lift body, lift gate, or camper that are not a permanent part of the motor vehicle will not be included on the title. Perfection of liens for such attachments must be made under the Uniform Commercial Code and filed with the Mississippi Secretary of State’s Office.

35 Miss. Admin. Code Pt. 7, R. 101 (Reserved)

35.VII.5.03 revised effective August 1, 2019

Page 13 of 26 Chapter 04 Power of Attorney to Transfer Motor Vehicle

35 Miss. Admin. Code Pt. 7, R. 100 Rule 100

A motor vehicle power of attorney is a document that enables a vehicle owner to grant all matters related to the registering, licensing, transfer of ownership, and/or titling of the vehicle to another individual. The proper form, “Power of Attorney to Transfer Motor Vehicle” should be obtained from the Department of Revenue. The “Power of Attorney to Transfer Motor Vehicle” form must be included as a supporting document with an application for new certificate of title and/or an application for replacement certificate of title.

35 Miss. Admin. Code Pt. 7, R. 101 Rule 101

A properly completed “Power of Attorney to Transfer Motor Vehicle” form cannot be reassigned to another individual and/or company.

35 Miss. Admin. Code Pt. 7, R. 102 Rule 102

A Power of Attorney to Transfer Motor Vehicle automatically expires and is no longer valid upon death of the owner.

35 Miss. Admin. Code Pt. 7, R. 103 (Reserved)

35.VII.5.04 revised effective August 1, 2019

Subpart 6 Vehicles

Chapter 01 Abandoned Vehicles

35 Miss. Admin. Code Pt. 7, R. 100 Rule 100

Selling Abandoned Vehicles for Repairing, Towing and/or Storage Costs is Authorized Under Miss. Code Ann. Section 63-23-1 et seq.

35 Miss. Admin. Code Pt. 7, R. 101 Rule 101

An abandoned motor vehicle means a vehicle that: 1. Has been left by the owner or on the owner’s behalf with an automobile dealer, repairman, or wrecker service and has not been picked up by the owner within forty (40) days from the agreed retrieval date. If there is no agreed retrieval date, the forty (40) days begins the day the vehicle is turned over to the dealer, repairman or wrecker service; 2. Is left unattended on a public street, road or highway or other public property for at least five (5) days; or 3. Has been lawfully towed to property owned by someone other than the vehicle owner, at the written request of a law enforcement officer and left there for at least forty (40) days without anyone claiming the vehicle.

35 Miss. Admin. Code Pt. 7, R. 102 Rule 102

Any authorized person intending to sell an abandoned vehicle must notify the owner and any lienholder by certified mail within ten (10) days that unless a claim on the vehicle is made within thirty (30) days or before the scheduled sale, whichever is later, the vehicle will be sold. The ten (10) days begins to run when the vehicle actually qualifies as an abandoned vehicle. The party initiating the sale should use the last known address of both the owner and lienholder. Such information may be obtained from the Mississippi Department of Revenue (Department) or from another appropriate authority. Any

Page 14 of 26 information obtained from an authority other than the Department may not be complete. If the Department determines that all required notifications were not made, a new title will not be issued.

35 Miss. Admin. Code Pt. 7, R. 103 Rule 103

If the letter is returned undelivered, the vehicle is not titled in Mississippi, or it is impossible to determine with reasonable certainty the identity and addresses of all lienholders, notification may be accomplished by publication once a week for three (3) consecutive weeks in a newspaper of general circulation in the county where the motor vehicle was abandoned. However, any owner or lienholder whose identity and address is known must be sent notice by certified mail.

35 Miss. Admin. Code Pt. 7, R. 104 Rule 104

Such notice, whether by certified mail or publication, must include the date, time, and location of the sale and the name and contact information of the party in possession of the abandoned vehicle. The notice should also include the amount of charges due that must be paid in order to claim the vehicle. The sale must be by public auction.

35 Miss. Admin. Code Pt. 7, R. 105 Rule 105

If the abandoned vehicle has no market value, it may be disposed of after receiving two (2) written statements from licensed automobile dealers as to the worthlessness of such vehicle and proper notification as described above has been sent to the owner and lienholders.

35 Miss. Admin. Code Pt. 7, R. 106 Rule 106

Any person proving ownership or any lienholder may claim the abandoned motor vehicle at any time prior to the sale by paying towing, repair, reasonable storage and other necessary expenses.

35 Miss. Admin. Code Pt. 7, R. 107 Rule 107

The proceeds of the sale in excess of repair, towing, and reasonable storage expenses and all expenses incurred in connection with the sale shall become the property of the county and be paid to the chancery clerk of the county in which the sale was held to be deposited into the county general fund, subject, however to any rights of the recorded lienholder.

35 Miss. Admin. Code Pt. 7, R. 108 Rule 108

A party selling an abandoned motor vehicle must submit an Affidavit of Abandonment to the Department along with documentation that the procedural requirements to sell an abandoned motor vehicle under Miss. Code Ann. Section 63-23-1 et seq. have been met.

35 Miss. Admin. Code Pt. 7, R. 109 (Reserved)

35 Miss. Admin. Code Pt. 7, R. 200 Sale of Motor Vehicle for Costs of Towing, Storage and Sale Only

35 Miss. Admin. Code Pt. 7, R. 201 Rule 201

Under Miss. Code Ann. Section 85-7-251, a towing company can retain possession of a motor vehicle until towing and reasonable storage costs are paid on a motor vehicle that: 1. Has been towed at the owner’s request; 2. Has been towed at the direction of a law enforcement officer; or 3. Has been towed upon request of a real property owner upon whose property a vehicle has been left without permission of the real property owner for more than five (5) days.

Page 15 of 26 202 Under Miss. Code Ann. Section 85-7-251, a towing company may sell a motor vehicle for towing and reasonable storage costs and the expenses necessary to procure the sale of the vehicle in lieu of following the procedures of Miss. Code Ann. Section 63-23-1 et seq. However, repair costs may not be obtained under Miss. Code Ann. Section 85-7- 251.

35 Miss. Admin. Code Pt. 7, R. 203 Rule 203

The towing company must notify local law enforcement of any vehicle that has been towed within twenty-four (24) hours of towing, unless the vehicle was towed at the request of the owner of the vehicle.

35 Miss. Admin. Code Pt. 7, R. 204 Rule 204

If the owner of a towed vehicle has not contacted the towing company within five (5) days of the initial tow, the towing company must obtain the names and addresses of any owner and lienholder from the Department or from another appropriate authority. If the information is not available from the Department or an appropriate authority, the towing company must make a good faith effort to locate ownership. The towing company must then notify the owner and lienholder by certified mail the amount due within ten (10) days following the initial tow. Any information obtained from an authority other than the Department may not be complete. If the Department determines that all required notifications were not made, a new title will not be issued.

35 Miss. Admin. Code Pt. 7, R. 205 Rule 205

If the amount due is not paid within thirty (30) days from the initial tow, the towing company must notify by certified mail the owner and lienholder that the vehicle will be sold if the towing and reasonable storage charges are not paid. The sale must be at least ten (10) days after the mailing of the certified letter.

35 Miss. Admin. Code Pt. 7, R. 206 Rule 206

The towing company must publish a notice of sale in a newspaper of general circulation once a week for two (2) consecutive weeks in the county where the motor vehicle was towed prior to the public auction. The publication may begin any time after the certified letter is mailed but must end prior to the public auction.

35 Miss. Admin. Code Pt. 7, R. 207 Rule 207

The notice, both by certified mail and publication, must include the date, time, and location of the sale and the name and contact information of the party in possession of the vehicle. The notice should also include the amount of charges due to claim the vehicle. The sale must be by public auction.

35 Miss. Admin. Code Pt. 7, R. 208 Rule 208

Any person proving ownership, or any lienholder, may claim the vehicle at any time prior to the sale by paying the towing and reasonable storage fees and the other expenses necessary to proceed with the sale.

35 Miss. Admin. Code Pt. 7, R. 209 Rule 209

The proceeds of the sale of such property, in excess of the amount needed to pay the towing and reasonable storage fees and the other necessary expenses of the sale, shall be held by the towing company for a period of six (6) months, and, if not reclaimed by the owner of the vehicle, shall become the property of the county and be paid to the chancery clerk of the county in which the sale was held to be deposited into the county general fund, subject, however to any rights of the recorded lienholder.

Page 16 of 26 210 A party selling a motor vehicle under Miss. Code Ann. Section 85-7-251 must submit documentation to the Department that the procedural requirements have been met.

35 Miss. Admin. Code Pt. 7, R. 211 (Reserved)

35 Miss. Admin. Code Pt. 7, R. 300 Sale of Motor Vehicle for Costs of Repair and Sale Only

35 Miss. Admin. Code Pt. 7, R. 301 Rule 301

A vehicle repair shop may sell a motor vehicle for the costs of repairing a motor vehicle under Miss. Code Ann. Section 85-7-107, in lieu of following the procedures of Miss. Code Ann. Section 63-23-1 et seq.

35 Miss. Admin. Code Pt. 7, R. 302 (Reserved)

35.VII.06.01 revised effective August 1, 2019

Chapter 02 Leased Vehicles

35 Miss. Admin. Code Pt. 7, R. 100 Rule 100

Any leased motor vehicle that will be based in the State of Mississippi is required to have a Mississippi license tag and must be titled under the provisions of the Mississippi Motor Vehicle Title Act.

35 Miss. Admin. Code Pt. 7, R. 101 Rule 101

When a motor vehicle is leased under a conditional sales agreement with the right of purchase or immediate right of possession available upon performance of the conditions stated in the agreement, the lessor is considered the owner and the registration and title will be issued in the name of the lessor in care of the lessee. The lessor of the vehicle is recorded on the certificate of title as first lienholder. If the lessor has given a security interest in the vehicle to a lender, the lender will be listed as the second lienholder. This type lease will be referred to as a Purchase Lease.

35 Miss. Admin. Code Pt. 7, R. 102 Rule 102

Leased vehicles that do not give the lessee the right of purchase or immediate right of possession upon performance of the conditions stated in the agreement, will be titled in the name of the lessor. If the lessor has given a security interest in the vehicle to a lender, the lender will be recorded as first lienholder. This type lease will be referred to as a Net Lease.

35 Miss. Admin. Code Pt. 7, R. 103 Rule 103

The burden is on the lessee, lessor, or conditional seller to determine the type of lease.

35 Miss. Admin. Code Pt. 7, R. 104 (Reserved)

35.VII.06.02 revised effective August 1, 2019

Chapter 03 Low Speed Vehicles

35 Miss. Admin. Code Pt. 7, R. 100 Rule 100

A low speed vehicle (LSV) is a device which may be used to carry people or property on public roads and for which a road and bridge privilege license is required to be obtained.

Page 17 of 26 The owner of an LSV may make application for a certificate of title and for a privilege license if the vehicle is used on a public road.

35 Miss. Admin. Code Pt. 7, R. 101 Rule 101

An LSV must be gasoline or electric-powered and meet the requirements of Part 49, Section 571.500 of the Code of Federal Regulations.

35 Miss. Admin. Code Pt. 7, R. 102 Rule 102

The Department will only issue a title for a LSV if the manufacturer’s certificate of origin clearly identifies the vehicle as a LSV. In addition, the vehicle identification number (VIN) assigned to the LSV by the original manufacturer must be a LSV-specific VIN.

35 Miss. Admin. Code Pt. 7, R. 103 Rule 103

Any vehicle originally manufactured as a recreational off-highway vehicle, including golf carts, will not be titled by the Department, regardless of whether it receives aftermarket modifications. A recreational off-highway vehicle is any motorized vehicle manufactured and designed exclusively for off-road use that is sixty-five (65) inches or less in width, has an unladen dry weight of two thousand (2,000) pounds or less, and travels on four (4) or more nonhighway tires.

35 Miss. Admin. Code Pt. 7, R. 104 (Reserved)

35.VII.6.03 revised effective August 1, 2019

Chapter 04 Motor Homes

35 Miss. Admin. Code Pt. 7, R. 100 Definitions:

35 Miss. Admin. Code Pt. 7, R. 101 Rule 101

“Final-Stage Manufacturer” means a person who performs manufacturing operations on an incomplete motor vehicle so that it becomes a complete motor home.

35 Miss. Admin. Code Pt. 7, R. 102 Rule 102

“First-Stage Manufacturer” means a person who manufactures an incomplete motor vehicle so that it can become a completed motor home upon final-stage manufacturing.

35 Miss. Admin. Code Pt. 7, R. 103 Rule 103

“Incomplete Motor Vehicle” means an assemblage of power train, steering system, and braking system to the extent that those systems are to be a part of the completed vehicle and that requires additional manufacturing operations, except addition of readily attachable components of minor finishing operation, to become a completed motor home.

35 Miss. Admin. Code Pt. 7, R. 104 Rule 104

“Motor Home” means a vehicular unit, designed to provide temporary living quarters, built into as an integral part of, or permanently attached to, a self- propelled Motor Vehicle chassis. The vehicle must contain permanently installed independent life support systems which meet the ANSI/NFPA 501 C standard, and provide at least four of the following facilities: cooking, refrigeration or ice box, self-contained toilet, heating and/or air conditioning, a portable water supply system including a faucet and sink, separate 110-125 volt electrical power supply and/or a LP gas supply.

35 Miss. Admin. Code Pt. 7, R. 105 Rule 105

“Multi-Stage Vehicle” means a motor vehicle that requires manufacturing operations, performed by separate manufacturers, to produce a completed motor home.

Page 18 of 26

35 Miss. Admin. Code Pt. 7, R. 106 (Reserved)

35 Miss. Admin. Code Pt. 7, R. 200 Procedures for Titling Motor Homes:

35 Miss. Admin. Code Pt. 7, R. 201 Rule 201

The VIN identifying the completed vehicle, after multi-stage manufacture, shall be the first-stage manufacture’s VIN, on the incomplete chassis and shall be the only VIN which is recorded or data-entered in the Department of Revenue files.

35 Miss. Admin. Code Pt. 7, R. 202 Rule 202

To convey ownership of a new motor home, the assignment shall be made on the multi- stage certificate of origin. The first-stage and multi-stage certificates of origin shall accompany the application for title and the title document shall reflect the first- manufacturer’s VIN and the multi-stage manufacturer’s name.

35 Miss. Admin. Code Pt. 7, R. 203 Rule 203

The make of the multi-stage manufacture shall be used to describe the complete vehicle on the title.

35 Miss. Admin. Code Pt. 7, R. 204 Rule 204

The model year of a new complete vehicle shall be the only year on the title.

35 Miss. Admin. Code Pt. 7, R. 205 Rule 205

All multi-stage manufacturers and this Agency shall uniformly enter the code “MH” for motor home in the “body type” area on the manufacturers certificate of origin, data record and the title, respectively.

35 Miss. Admin. Code Pt. 7, R. 206 Rule 206

A completed van-type vehicle, which has been altered to provide temporary living quarters, shall not be considered a motor home.

35 Miss. Admin. Code Pt. 7, R. 207 (Reserved)

35.VII.6.04 revised effective August 1, 2019

Chapter 05 Salvage Vehicles

35 Miss. Admin. Code Pt. 7, R. 100 Definitions

35 Miss. Admin. Code Pt. 7, R. 101 Rule 101

“Branded Title” is a specific designation made on a vehicle’s title that will indicate a vehicle has sustained damage or might be potentially unsafe to operate. Examples of branded titles include salvage, rebuilt, flood-damaged, and hail-damaged.

35 Miss. Admin. Code Pt. 7, R. 102 Rule 102

“Junked Certificate of Title” shall mean a document issued by the Department for a vehicle that has been scrapped, dismantled or destroyed and the owner has surrendered the Mississippi certificate of title to the Department in accordance with Miss. Code Ann. Section 63-21-39.

Page 19 of 26

35 Miss. Admin. Code Pt. 7, R. 103 Rule 103

“Rebuilt vehicle” shall mean a vehicle that has been reconstructed in this state and in the reconstruction process, one of the following has been repaired or replaced as a result of collision damage: one (1) major and five (5) minor component parts; six (6) minor component parts; two (2) or more major component parts; the cowl or firewall; or both the front end assembly and rear clip. 104 “Salvage vehicle” shall mean a motor vehicle that an insurance company obtains from the owner as a result of paying a total loss claim resulting from collision, fire, flood, accident, hail damage, trespass, un-recovered theft, or another occurrence. A motor vehicle that is ten (10) years old or older with a value of one thousand five hundred dollars ($1,500) or less or a motor vehicle with damage that will require the replacement or repair of five (5) or fewer minor component parts will not fall under the definition of salvage vehicle.

35 Miss. Admin. Code Pt. 7, R. 105 Rule 105

“Salvage Certificate of Title” shall mean a document issued by the Department for a salvage vehicle as defined in Section 104.

35 Miss. Admin. Code Pt. 7, R. 106 Rule 106

Component parts for a passenger vehicle shall mean: 1. Major component parts: a. cowl or firewall; b. front-end assembly; c. rear clip including roof panel; d. roof panel when installed separately; e. frame or any portion thereof or, in the case of a unitized body, the supporting structure that serves as the frame; f. any combination of five (5) minor component parts; g. motor or engine (replaced). 2. Minor component parts: a. each door; b. hood; c. each fender or quarter panel; d. deck lid or hatchback; e. each bumper; f. both T-tops; g. transmission/transaxle (replaced).

As used in this section: a. Front-end assembly means all of the following: hood, fenders, bumper, radiator supports, and supporting members for such items. In the case of a unitized body, the front-end assembly includes frame support members.

Page 20 of 26 b. Rear-clip means all of the following: roof, quarter panels, trunk lid, floor pan, and the support members of such items.

35 Miss. Admin. Code Pt. 7, R. 107 Rule 107

Component parts for a truck, truck type, or bus type vehicle shall mean any component part shown in section 106(1) not listed in this section that is common to trucks, truck type, or bus type vehicles when repaired or replaced, and the following: 1. Major component parts: a. frame or any portion thereof or, in the case of a unitized body, the supporting structure that serves as the frame; b. cab; c. cargo compartment floor panel or passenger compartment floor pan; d. transmission or transaxle (replaced); e. motor or engine (replaced); f. roof panel. 2. Minor component parts: a. each door; b. hood; c. each fender or quarter panel; d. each bumper; e. tailgate.

35 Miss. Admin. Code Pt. 7, R. 108 Rule 108

Component parts for a motorcycle shall mean: 1. engine or motor; 2. transmission or transaxle; 3. frame; 4. front fork; 5. crankcase.

35 Miss. Admin. Code Pt. 7, R. 109 (Reserved)

35 Miss. Admin. Code Pt. 7, R. 200 Rule 200

Used Motor Vehicle Part Dealers and Scrap Metal Processors 201 Before a used motor vehicle parts dealer or scrap metal processor may purchase or receive a motor vehicle for the purpose of scrapping, dismantling, or destroying the vehicle, the used motor vehicle parts dealer or scrap metal processor must verify the absence of any lien on the motor vehicle by utilizing the Department’s automated statewide motor vehicle registration system. 202 A used motor vehicle parts dealer or scrap metal processor may not purchase or receive a motor vehicle for the purpose of scrapping, dismantling, or destroying the vehicle during any time a lien exists on the motor vehicle. 203 In the event an insured motor vehicle becomes a total loss and the insurance company

Page 21 of 26 becomes the owner of the motor vehicle and subsequently sells this vehicle to a salvage or junk dealer, the vehicle is considered as salvage and ceases to be a motor vehicle. The original title should be forwarded by the owner, properly filled out and signed, to the Department of Revenue along with the vehicle identification plate. If, on the other hand, the vehicle is to be repaired, it would be brought within the definition of a motor vehicle. When the motor vehicle status has reached state of repair, the previous title must be attached to the application for certificate of title and properly assigned to the new owner. This, of course, would not be the insurance company because it would have surrendered all claims to said vehicle. 204 (Reserved) 300 Insurance Companies

35 Miss. Admin. Code Pt. 7, R. 301 Rule 301

An insurance company that becomes the owner of a motor vehicle as a result of paying a total loss claim shall apply to the Department for a salvage title within seventy-two (72) hours after obtaining the insured’s certificate of title. Such application shall be made by the insurance company in the manner and in such form prescribed and provided by the Department. In order to obtain a salvage title, the insurance company must: 1. Surrender the current certificate of title and odometer disclosure statement with the title application; 2. Submit documentation to show that the title application is for a salvage vehicle; 3. Submit with the application a signed statement written on company letterhead showing the type of occurrence, including: a. collision damage; b. hail damage; c. flood damage; d. recovered theft; or e. unrecovered theft. 4. Indicate in the statement whether or not the vehicle will require replacement of six (6) minor component parts; and 5. Staple this statement to the certificate of title and note on the face of the certificate the type of occurrence.

35 Miss. Admin. Code Pt. 7, R. 302 Rule 302

The provisions of this section shall not apply to a vehicle that is ten (10) years old or older with a value prior to the loss of one thousand five hundred dollars ($1,500) or less that will require the replacement of five (5) or fewer minor component parts in the reconstruction process.

Page 22 of 26 303 If ownership of a salvage vehicle has not been acquired by an insurer, the owner must surrender the certificate of title for such vehicle to a designated agent of the Department prior to any sale or disposition of such vehicle and not later than thirty (30) days from the date that the vehicle becomes a salvage vehicle. 304 An insurance company that acquires ownership of a motor vehicle in this state and is required to apply for a salvage certificate of title as provided in Section 301 will use the First Reassignment by Licensed Dealer section on the back of the title to transfer ownership of said vehicle. The insurance company will list the purchaser, who may be the insured, a rebuilder or dismantler, in the reassignment section. The purchaser must attach to the certificate of title a signed statement that indicates the type of occurrence, including: collision damage, hail damage, flood damage, recovered theft, or unrecovered theft. If the purchaser is a company, the statement must be on company letterhead. 305 (Reserved) 400 Rebuilt Motor Vehicles

35 Miss. Admin. Code Pt. 7, R. 401 Rule 401

The owner/rebuilder of a motor vehicle that is described in a salvage certificate of title shall, after reconstruction in this state and before sale of such vehicle, present the same to the Mississippi Department of Public Safety at an appointed date, time, and place for the purpose of inspection of said rebuilt vehicle. 1. The owner/rebuilder must present an Application for Inspection of a Salvage/Rebuilt Vehicle, including Salvage Certificate of Title, notarized bills of sale for all major component parts used in the reconstruction process, and invoices for minor component parts used in the reconstruction process. 2. Bills of sale and invoices for component parts shall include the name, address, and telephone number of the person from whom the parts were acquired and the year, make, model, and vehicle identification number of the vehicle from which the parts were removed and sold. All such parts shall be described in the Application for Inspection of a Salvage/Rebuilt Vehicle form. 3. The Department of Public Safety inspection officer shall endorse the application for inspection or explain on said application the reason why retitling should not occur. 4. When the vehicle successfully passes inspection, the inspector will issue a Completion/Certification of Vehicle Inspection form. The rebuilder shall then apply for a certificate of title as the owner and surrender the current tile, Application for Inspection of a Salvage/Rebuilt Vehicle, Completion/Certification of Vehicle Inspection, and proof of ownership of parts used in the rebuilding process.

Page 23 of 26 5. The application for certificate of title shall also include the documentation as prescribed in Section 411 paragraphs 1 and 2.

35 Miss. Admin. Code Pt. 7, R. 402 Rule 402

The inspection and certification of a rebuilt motor vehicle shall include an examination of the vehicle and its parts, which the applicant for inspection has designated as replaced or repaired, to determine that the identification numbers of the vehicle or its parts have not been removed, falsified, altered, defaced, or destroyed; that the vehicle information is true and correct; and that there are no indications that the vehicle or any of its parts are stolen. Such certification shall not attest to the roadworthiness or safety condition of the vehicle. 403 Any vehicle branded as a salvage vehicle in another jurisdiction must be repaired and pass inspection in the other jurisdiction prior to bringing the vehicle into this state. The title application to retitle the vehicle in this state must be accompanied with the necessary documentation to substantiate the vehicle passed inspection in the other jurisdiction. 404 The Department will brand titles as follows: 1. There shall be a “rebuilt” brand affixed to the certificate of title of a motor vehicle, other than a motorcycle, where the following are repaired or replaced in the reconstruction process: a. one (1) major and five (5) minor component parts; b. six (6) or more minor component parts; c. two (2) or more major component parts; d. cowl or firewall; or e. both the front-end assembly and a rear clip. 2. There shall be a “rebuilt” brand affixed to the certificate of title of a motorcycle when one (1) component part listed in Section 108 above is replaced in rebuilding the motorcycle. 3. The rebuilder of a vehicle or motorcycle described in a Salvage Certificate of Title issued by this or any other state or in a comparable ownership document of a vehicle that is capable of being rebuilt must present documentation showing the parts that have been repaired or replaced. 4. Brands that reveal a pertinent fact or facts about the vehicle that appear on titles issued by this state or another state will be maintained or carried forward on certificates of title issued by this state. 5. The Department may brand a title with “Flood Damage,” “Hail Damage,” or use other brands where appropriate. 6. If vehicle damage is from collision or hail and no more than five (5) minor component parts are repaired or replaced in the reconstruction of the vehicle, the new certificate of title shall be free of any brands.

Page 24 of 26

35 Miss. Admin. Code Pt. 7, R. 405 Rule 405

When retitling after inspection, the application for certificate of title shall be made by the owner/rebuilder in the same manner as provided in Section 404. A subsequent title on a flood or hail damaged vehicle shall be issued with a “Flood Damage” or “Hail Damage” brand affixed.

35 Miss. Admin. Code Pt. 7, R. 406 Rule 406

A motor vehicle for which a salvage certificate of title or a certificate of title that contains a brand or sub-brand indicating “CERTIFICATE OF DESTRUCTION,” “JUNK,” “NON-REBUILDABLE,” or “PARTS ONLY” was previously issued by any titling jurisdiction shall not be titled in this state.

35 Miss. Admin. Code Pt. 7, R. 407 Rule 407

Unlawful to Operate Salvage Vehicle Exception. It shall be unlawful to operate a motor vehicle described in a Salvage Certificate of Title upon the roads and highways of this state, except for going to and from the designated inspection site on the day of a scheduled inspection. There shall be no license tag issued for a vehicle described in a salvage title or such similar ownership document issued by another titling jurisdiction.

35 Miss. Admin. Code Pt. 7, R. 408 Rule 408

Titling Vehicle That is Rebuilt but Insurer Failed to Obtain Salvage Title. If a rebuilder acquires a damaged vehicle for which the insurer or owner did not obtain a salvage title and rebuilds it in this state, he shall proceed as provided in Section 404. The rebuilder shall thereafter apply for a certificate of title in the rebuilder’s name as set out in Section 404.

35 Miss. Admin. Code Pt. 7, R. 409 Rule 409

Rebuilder Takes Ownership by Reassignment of Title in This State. A rebuilder in this state who takes ownership of a vehicle by reassignment of title by an insurance company shall include with his application for a new certificate of title the documentation required in Sections 404 and 411, except a Department of Public Safety Completion/Certification of Vehicle Inspection form is not required. The Department may require inspection of any vehicle prior to issuance of a new certificate of title. On such requirement, the rebuilder shall proceed according to Sections 404 and 411, except the certificate of title reassigned to the rebuilder shall be attached instead of the salvage certificate of title.

35 Miss. Admin. Code Pt. 7, R. 410 Rule 410

Rebuilder to Obtain New Certificate of Title Prior to Sale. A new certificate of title shall be applied for and obtained by the owner/rebuilder prior to retail or wholesale sale of a vehicle that he rebuilt in this state, whether ownership was acquired by assignment of title of a salvage vehicle from an insurer or by reassignment of title.

35 Miss. Admin. Code Pt. 7, R. 411 Repair and Titling Rebuilt Vehicle:

Page 25 of 26 1. Repair does not include cosmetic repairs, such as surface scratches or blemishes to the painted finish, key dings, and minor dents and scrapes to minor component parts when such are documented by color photographs as set out in paragraph 2 below, whether the current title is “Salvage” or has been reassigned to a rebuilder by the insurer. 2. The rebuilder must include with every Application for Inspection of a Salvage/Rebuilt Vehicle form a minimum of four (4) color photographs of the vehicle in its unrepaired condition. The photographs must be submitted with the rebuilder’s application so that they are available to the Department of Public Safety inspector at the time of the inspection. The photographs must be made as follows: one (1) from each of four (4) different angles looking from a fender on a line diagonally to the fender on the opposite side and end of the vehicle. The photographs must be taken from a distance of not more than six (6) feet from the vehicle and clearly show the back or front, side and top of the vehicle from each angle. The rebuilder may include additional photographs that the rebuilder deems necessary to show other areas of concern. 3. If the photographs do not clearly show prior existing damage as claimed, repair of such damage will be counted as one (1) component part for each such part(s) so repaired.

35 Miss. Admin. Code Pt. 7, R. 412 (Reserved)

35.VII.6.05 revised effective September 4, 2025

Chapter 06 Oversized Vehicles

35 Miss. Admin. Code Pt. 7, R. 100 Rule 100

Vehicles that exceed eight (8) feet in width and/or thirteen (13) feet six (6) inches in height are not titled under the Motor Vehicle Title Act. Pursuant to Miss. Code Ann. Section 63-21-9, this does not include manufactured homes and mobile homes.

35 Miss. Admin. Code Pt. 7, R. 101 Rule 101

Security interest in such vehicles is perfected under the Uniform Commercial Code by delivery of the required documents to the Office of Secretary of State.

35 Miss. Admin. Code Pt. 7, R. 102 (Reserved)

35.VII.6.06 revised effective August 1, 2019

Chapter 07 U. S. Government Vehicles

35 Miss. Admin. Code Pt. 7, R. 100 Rule 100

When an individual or company purchases a motor vehicle that came through a title exempt agency, such as agencies of the United States Government, and such vehicle was

Page 26 of 26 manufactured or assembled after July 1, 1969, the new owner must make application for certificate of title.

35 Miss. Admin. Code Pt. 7, R. 101 Rule 101

Where such vehicle is purchased directly from such United States Agency, application for certificate of title can be supported by a current bill of sale, only, provided the vehicle was not previously titled.

35 Miss. Admin. Code Pt. 7, R. 102 (Reserved)

35.VII.6.07 revised effective August 1, 2019

Chapter 08 Voluntarily Titled Vehicles 100 Boat trailers are not subject to title; however, voluntary applications for title will be accepted. The manufacturer’s certificate of origin (MCO) will be required as a supporting document for new boat trailers. If the MCO is not available, then the title bond procedures will need to be followed to receive a title. 101 All-terrain vehicles (ATVs) and utility task/terrain vehicles (UTVs) that are in this state and manufactured or assembled or subject of first sale for use before July 1, 2025, are voluntarily titled. The manufacturer’s certificate of origin (MCO) and/or a bill of sale will be required as supporting documents when titled. If the MCO is not available, then the title bond procedures will need to be followed to receive a title. 102 (Reserved) 35.VII.6.08 revised effective September 4, 2025 Chapter 09 Non-Titled Vehicles

35 Miss. Admin. Code Pt. 7, R. 100 Rule 100

Motor Vehicles loaned to schools for use in school related programs are considered owned by the dealer and not required to be titled. Under these circumstances and if “new” at time of loan, such vehicle shall retain “new vehicle” status upon return to dealer.

35 Miss. Admin. Code Pt. 7, R. 101 Rule 101

A motorcycle with an engine displacement of less than fifty (50) cubic centimeters is exempt from being titled; this includes, but is not limited to, every motor scooter, mini- bike and moped.

35 Miss. Admin. Code Pt. 7, R. 102 (Reserved)

35.VII.6.09 revised effective August 1, 2019

Part 8 Miscellaneous Tax

35 Miss. Admin. Code Pt. 8, R. 100 Rule 100

The Commissioner and Chairman of the State Tax Commission having received numerous complaints from the enforcement branch of the Alcoholic Beverage Control Division, members of the State Highway Patrol and other law enforcement personnel, that there presently exists in the State the widespread practice of transporting beer from counties wherein said beer is legal into counties where beer is not legal, and the making of sales thereof in such "dry" areas; that the Commissioner feels it is necessary and expedient at this time to enact regulations concerning the transportation of beer through "dry" counties and between counties wherein the sale and possession thereof is legal. In furtherance of the aforesaid purpose, the commissioner does hereby enact, promulgate and adopt the following rules and regulations:

Page 2 of 12

Beer shall not be transported through any county in this State which forbids the sale of beer unless by common carrier or unless its transportation is in closed trucks of wholesale beer dealers, the aforesaid trucks carrying the name of the wholesale dealer in large letters on the side of the truck so that it might be easily legible to persons traveling along the highway. 2. All transportation of beer between counties within this State must be accompanied by a bill of lading or an invoice stating the name of the consignor and consignee, the date and time of departure, route to be taken in transit and showing the destination to be into a county or municipality that legally authorizes the sale of beer; or which is accompanied by a load out sheet stating the name of the consignor and that the beer is to be delivered to retailers in a county or municipality which authorizes the sale of beer, the date and time of departure and the route to be taken in transit. 3. Any permittee found in violation of this regulation shall, upon due notice and hearing, have his permit cancelled. 4. Exceptions to this rule may be made upon written authority of the Commissioner permitting the transportation of beer between counties in unusual and necessitous situations.

35 Miss. Admin. Code Pt. 8, R. 101 Reserved

Chapter 02 Expiration Date for Permits and Licenses

35 Miss. Admin. Code Pt. 8, R. 100 Rule 100

Retail beer permits and licenses shall be issued for twelve (12) months and shall be renewed annually on the first day of the month in which the permit expires.

35 Miss. Admin. Code Pt. 8, R. 101 Rule 101

All wholesaler’s, manufacturer’s and brewpub’s licenses to distribute beer in each county will be issued for twelve (12) months and shall be renewed annually on the first day of the month in which the license expires..

35 Miss. Admin. Code Pt. 8, R. 102 Rule 102

A permittee that has been issued more than one beer permit will be required to have one expiration date for all beer permits held. Permittees holding more than one beer permit with different expiration dates will be issued prorated beer permits in order to align expiration dates.

35 Miss. Admin. Code Pt. 8, R. 103 Rule 103

Temporary permits will be issued to retailers for special events lasting fourteen (14) days or less to expire at the end of the fourteenth

day or when the event ceases, whichever occurs first.

35 Miss. Admin. Code Pt. 8, R. 104 Reserved

Subpart 02 Gas Severance Tax

Chapter 01 Payment of Tax -- Persons Liable

Page 3 of 12

35 Miss. Admin. Code Pt. 8, R. 100 Rule 100

The tax on gas severed from within the state is levied upon the producers of such gas in the proportion of their ownership. The amount of tax on gas retained and used by a producer for fuel shall be paid by the producer. Otherwise, the tax is deducted, withheld, and paid as provided below.

35 Miss. Admin. Code Pt. 8, R. 101 Rule 101

The operator, being the person in charge of the production operations, is authorized, empowered, and required to deduct the amount of severance tax from any amount due the owners of such gas before making payments to such owners. Such tax shall become due and payable by the operator to the State Tax Commission.

35 Miss. Admin. Code Pt. 8, R. 102 Rule 102

When the operator sells or delivers gas produced by him for owners taking their gas in kind under contracts or agreements requiring the purchaser to pay the owners direct, then the purchaser shall be empowered and required to deduct and withhold the amount of severance tax from any amount due to such owners before making payments to such owners. Such tax shall become due and payable by the purchaser to the State Tax Commission.

35 Miss. Admin. Code Pt. 8, R. 103 Rule 103

When payment to the owners for any severed gas is being withheld for any reason by the operator or purchaser, then the operator or purchaser withholding such payment is empowered and required to deduct and withhold the severance tax from the gross amount of payment being withheld and to remit such tax to the State Tax Commission.

35 Miss. Admin. Code Pt. 8, R. 104 Reserved

Chapter 02 Determining the Sales Price or Market Value of Natural Gas

35 Miss. Admin. Code Pt. 8, R. 100 General Provisions

35 Miss. Admin. Code Pt. 8, R. 101 Rule 101

Miss. Code Ann. Section 27-25-701(d) requires the sales price or market value of natural gas to be determined at the mouth of the well.

35 Miss. Admin. Code Pt. 8, R. 102 Rule 102

If natural gas is used by the producer or owner of the well, resulting in no actual sale, a sales price or market value must still be determined to compute severance tax.

35 Miss. Admin. Code Pt. 8, R. 103 Rule 103

The actual sales price negotiated for the sale of natural gas occurring at the mouth of the well shall be the sales price or market value of the natural gas for severance tax purposes under Miss. Code Ann. Section 27-25- 701(d) unless the relationship between the buyer and the seller is such that the consideration paid, if any, is not indicative of the true market value.

35 Miss. Admin. Code Pt. 8, R. 104 Rule 104

If the sale of natural gas occurs at the mouth of the well but is not indicative of the true market value, the Commissioner may use the valuation requirements for natural gas that is used by the producer or owner of the well to determine the sales price or market value for severance tax purposes under Miss. Code Ann. Section 27-25-701(d).

Page 4 of 12

35 Miss. Admin. Code Pt. 8, R. 105 Rule 105

Natural gas which is used by the producer or owner of the well shall be valued at the same value per MCF as that of gas of like quality that is sold in the same or nearby field.

35 Miss. Admin. Code Pt. 8, R. 106 Rule 106

If there is no sale of gas of like quality in the same or nearby field, the value of the gas used shall be reported at the statewide benchmark to be determined by the Commissioner. The statewide benchmark shall be reviewed and amended as needed but no more often than quarterly.

35 Miss. Admin. Code Pt. 8, R. 107 Rule 107

In circumstances where the sale of natural gas does not occur at the mouth of the well, the market value of the natural gas shall be determined by deducting allowable marketing and transportation costs from the producer’s gross proceeds from the sale of gas and by adding back the value of byproducts created while processing the gas for sale.

35 Miss. Admin. Code Pt. 8, R. 108 (Reserved)

35 Miss. Admin. Code Pt. 8, R. 200 Rule 200

Allowable Deductions for the Determination of the Value of Natural Gas sold at the Well Head

35 Miss. Admin. Code Pt. 8, R. 201 Rule 201

Certain marketing costs and third party transportation will be considered allowable deductions for the determination of the value of natural gas. Costs which are not allowed as a deduction under any circumstances include, but are not limited to, costs associated with production, costs associated with normal lease separation, insurance premiums, and all operating expenses.

35 Miss. Admin. Code Pt. 8, R. 202 Rule 202

Marketing costs and third party transportation are those costs incurred by the producer to get the unmarketable gas to a salable state and /or deliver the gas from the mouth of the well to the market. Deductible marketing costs are limited to: 1. Sweetening which is defined as any activity that removes acid gases, such as hydrogen sulfide and carbon dioxide, from the well stream. Sweetening includes absorption, stabilization, thermal and catalytic conversions, chemical reaction and regeneration; 2. Dehydration which is defined as any activity which removes water vapor that is commonly associated with raw natural gas; 3. Compression which is defined as any activity associated with processing or transporting gas which mechanically increases the pressure of natural gas; 4. Third party transportation which will only be an allowable deduction if the actual charges are for trucking, barging, and pipeline fee charged the producer by an entity other than the purchaser.

Page 5 of 12

35 Miss. Admin. Code Pt. 8, R. 203 Rule 203

Natural gas used by the owner or producer on a leased property is subject to the provisions of this Chapter of the Mississippi Administrative Code as well as applicable statutory provisions. The value of natural gas used shall be reported as that of like quality that is sold in the same or nearby field.

35 Miss. Admin. Code Pt. 8, R. 204 Rule 204

The deductions for marketing costs and third party transportation cannot exceed an 8% limit of the sales price of the gas, there will be no carryover deduction allowed.

35 Miss. Admin. Code Pt. 8, R. 205 Rule 205

Taxpayers utilizing available deductions are required to report these deductions to the Mississippi Department of Revenue when filing monthly gas severance tax returns.

35 Miss. Admin. Code Pt. 8, R. 206 Rule 206

Taxpayers must report the total gross proceeds from the sale of gas and enter the deductions taken on each lease as a separate entry on the monthly gas severance tax return. If a producer has received approval for deductions previously, the producer must resubmit the request and documentation for the deductions.

35 Miss. Admin. Code Pt. 8, R. 207 (Reserved)

35 Miss. Admin. Code Pt. 8, R. 300 Rule 300

A school district’s royalty interest in sixteenth section land is exempt from gas severance. Gas producers or purchasers will report total cubic feet of gas produced or purchased on sixteenth section land and use code 8 on the return to exempt the school district’s royalty interests from the total produced or purchased.

35 Miss. Admin. Code Pt. 8, R. 400 (Reserved)

Subpart 03 Tobacco Tax

Chapter 01 Stamps shall be properly affixed to cigarettes; Stamp invoices

35 Miss. Admin. Code Pt. 8, R. 100 Rule 100

The following tobacco is contraband and subject to confiscation without the need of a warrant if found present by the Department or its agents: 1. Any cigarettes which, if a wholesaler, are in its possession for more than 72 hours and have not been authorized to be segregated for interstate sale or maintained in a bonded warehouse; or, if a retailer, are in its possession for more than 48 hours; and a. Which do not have the applicable stamp properly affixed as required; or b. Which are possessed by a wholesaler or retailer who doesn’t have a tobacco permit or whose permit has been revoked. 2. Any other tobacco product, a. Which are possessed by a wholesaler or retailer who doesn’t have a tobacco permit or whose permit has been revoked; or b. Upon which the proper excise tax has not been paid.

Page 6 of 12

35 Miss. Admin. Code Pt. 8, R. 101 Rule 101

Affixed as required means, 1. So securely affixed as to require the continued application of water or of steam to remove it, or otherwise affixed so that it may not be removed without destruction or mutilation; and 2. A materially complete stamp is affixed, as opposed to merely a partial stamp. Although a small portion of the stamp may be missing and still be considered “materially complete”, the stamp is not considered “materially complete” if it does not clearly indicate the due payment of the tax and/or clearly identify, by serial number or otherwise, the permittee who affixed the stamp to the particular package as required by Miss. Code Ann. Section 27-69-3(r). All digits within the serial number or letters within the word “Mississippi” must be legible. Any stamp which fails to meet these standards will be considered “partial stamps” and subject the cigarettes, to which it is affixed, to confiscation.

35 Miss. Admin. Code Pt. 8, R. 102 Rule 102

Retailers and wholesalers shall maintain all stamp invoices separately from other invoices for a period of three years from the date of purchase of such stamps. Failure to do so may be considered a violation of Miss. Code Ann. Section 27-69-37.

35 Miss. Admin. Code Pt. 8, R. 103 (Reserved)

Chapter 02 Refund

35 Miss. Admin. Code Pt. 8, R. 100 Refund on Damaged or Unfit Goods

35 Miss. Admin. Code Pt. 8, R. 101 Rule 101

Pursuant to Miss. Code Ann. Section 27-69-49, there are certain circumstances under which a dealer may receive a refund due to cigarettes which have become unfit for use and consumption, unsalable, or for any other legitimate loss which may occur, upon proof of such loss.

35 Miss. Admin. Code Pt. 8, R. 102 Rule 102

Any cigarettes which are shown to be six (6) months or older will be presumed to be unfit for use and consumption for purposes of Miss. Code Ann. Section 27-69-49.

35 Miss. Admin. Code Pt. 8, R. 103 Rule 103

All refunds under this regulation shall be made in the form of new stamps being issued to the dealer. The value of the refund shall be equal to the aggregate value of the tax paid on the goods adjudged to be unfit for use, consumption, or unsalable.

35 Miss. Admin. Code Pt. 8, R. 104 Rule 104

The request for refund shall be accompanied by an affidavit prepared pursuant to Miss. Code Ann. Section 27-69-49.

35 Miss. Admin. Code Pt. 8, R. 105 Rule 105

Any cigarettes for which a refund is paid shall not be offered for sale or given away within this State.

35 Miss. Admin. Code Pt. 8, R. 106 (Reserved)

35 Miss. Admin. Code Pt. 8, R. 200 Refund on Goods Shipped into Other States

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35 Miss. Admin. Code Pt. 8, R. 201 Rule 201

Any wholesaler who ships to another state cigarettes upon which the proper Mississippi tax has been previously paid and upon which a Mississippi stamp is affixed may request a refund of the tax paid on such cigarettes pursuant to Miss. Code Ann. Section 27-69-51.

35 Miss. Admin. Code Pt. 8, R. 202 Rule 202

Such refund shall consist of new stamps issued to it by the Commissioner in an amount equal to the aggregate value of the tax previously paid.

35 Miss. Admin. Code Pt. 8, R. 203 Rule 203

A request for such refund must be accompanied by an affidavit from the purchaser swearing certain information, including the units and items received, dates of delivery, acknowledgment of receipt, that Mississippi stamps were on the cigarettes in an amount equal to the amount of refund being requested by the wholesaler, and an acknowledgment that the stamps affixed to the cigarettes for which refund is requested have had the cancellation marked “void” by ink or by imprinting.

35 Miss. Admin. Code Pt. 8, R. 204 (Reserved)

Chapter 03 Cigarette Making Machines; taxability of Tobacco Products

35 Miss. Admin. Code Pt. 8, R. 100 Rule 100

Federal guidelines, IRS 26 U.S.C. 5711, 5712, 5713 and 27 CFR Part 40 of the Alcohol and Tobacco Tax and Trade Bureau regulations, require every person, before commencing business as a manufacturer of tobacco products, to apply for a permit from the appropriate federal agency to engage in such business and file a bond. A person shall not engage in business as a manufacturer of tobacco products without a permit to engage in such business. Manufacturing shall include the making of cigarettes by the use of a cigarette making machine on the premises of or in an area controlled by a tobacco retailer.

35 Miss. Admin. Code Pt. 8, R. 101 Rule 101

A “cigarette making machine” is a machine or mechanical device (designed for commercial use, primarily operated by a power source other than human power, such as electricity) that is loaded with loose tobacco and cigarette tubes, cigarette papers or any substance not containing tobacco for the purposes of producing, filling, rolling, dispensing or otherwise generating cigarettes. Hand-held, manually operated machines sold by retailers to consumers for off-premises use in making cigarettes for personal consumption are not considered cigarette making machines for purposes of this regulation.

35 Miss. Admin. Code Pt. 8, R. 102 Rule 102

Pursuant to Miss. Code Ann. Section 27-69-15, a tobacco retailer is required to present all un-stamped cigarettes it receives to a permitted wholesaler within 48 hours of receipt for the purpose of having the proper stamps affixed to the cigarettes in the same manner as if the cigarettes had come from the wholesaler.

35 Miss. Admin. Code Pt. 8, R. 103 Rule 103

In addition to other means of receipt, a tobacco retailer shall be deemed to receive cigarettes if manufactured on-site or in an area controlled on behalf of the tobacco retailer by an employee or agent operating the machine or permitting others, including customers, to operate a cigarette making machine. Therefore, a tobacco retailer must ensure that all

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cigarettes received via manufacturing by a cigarette making machine as outlined in the preceding sentence are properly stamped.

35 Miss. Admin. Code Pt. 8, R. 104 Rule 104

Any retailer who assembles cigarettes on-site using a cigarette making machine and who did not sign the 1998 Master Settlement Agreement, as defined in Miss. Code Ann. Section 27-70-3, shall be considered a manufacturer subject to the Nonsettling Manufacturer Cigarette Fee as well as all requirements set forth in Miss. Code Ann. Section 27-70-1, et seq. for nonsettling manufacturers.

Subpart 04 Excise Tax on Medical Cannabis

Chapter 01 Tax Rate, Fair Market Value, Returns and Payments

35 Miss. Admin. Code Pt. 8, R. 100 Rule 100

A 5% excise tax shall be applied to the sales price of a cultivation facility’s first sale or transfer of cannabis flower or cannabis trim to a medical cannabis establishment.

35 Miss. Admin. Code Pt. 8, R. 101 Rule 101

The 5% excise tax shall apply to the fair market value of the cannabis flower or cannabis trim on the first sale or transfer of cannabis flower or cannabis trim to a medical cannabis establishment with a common ownership of the cultivator.

35 Miss. Admin. Code Pt. 8, R. 102 Rule 102

The fair market value is the value established by the Department of Revenue based on the price that a medical cannabis establishment would pay to the cultivator in an arm’s length transaction for medical cannabis on the wholesale market. The Department of Revenue will calculate fair market value using reported sales of each category of medical cannabis using medical cannabis cultivator transactions recorded in the State’s seed-to-sale tracking system. Fair market value will be set by the Department of Revenue on January 1 and July 1 of each calendar year and posted to the Department of Revenue’s website.

35 Miss. Admin. Code Pt. 8, R. 103 Rule 103

All cultivators will be required to file medical cannabis excise tax returns electronically by the twentieth of the month following the reporting period.

35 Miss. Admin. Code Pt. 8, R. 104 Rule 104

Electronic payment of excise tax will be required unless the medical cannabis cultivation facility has written approval from the Department of Revenue to pay using another method.

35 Miss. Admin. Code Pt. 8, R. 105 (Reserved)

35.VIII.4.01 effective June 16, 2022

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Subpart 5 Electronic Nicotine Delivery System (ENDS) Chapter 01 Product Registration, Returns, and Payments

35 Miss. Admin. Code Pt. 8, R. 100 Definitions

35 Miss. Admin. Code Pt. 8, R. 101 Rule 101

“Electronic Nicotine Delivery System (ENDS) product”: 1. means any noncombustible product that employs a heating element, power source, electronic circuit, or other electronic, chemical, or mechanical means, regardless of shape or size, to produce vapor from nicotine in a solution; 2. includes a consumable nicotine liquid solution suitable for use in an ENDS product, whether sold with the product or separately; and 3. does not include any product regulated as a drug or device under Chapter V of the Federal Food, Drug, and Cosmetic Act (21 USC Section 351 et seq.).

35 Miss. Admin. Code Pt. 8, R. 102 Rule 102

“Timely filed premarket tobacco product application” means an application pursuant to 21 USC Section 387j for an ENDS product containing nicotine derived from tobacco marketed in the United States as of August 8, 2016, that was submitted to the United States Food and Drug Administration on or before September 9, 2020, and accepted for filing.

35 Miss. Admin. Code Pt. 8, R. 103 Rule 103

“Directory” means the Mississippi ENDS Directory, which is a listing of certified ENDS products eligible to be sold or made available for sale in Mississippi.

35 Miss. Admin. Code Pt. 8, R. 104 (Reserved)

35 Miss. Admin. Code Pt. 8, R. 200 General

35 Miss. Admin. Code Pt. 8, R. 201 Rule 201

Every manufacturer of ENDS products that are sold for retail or for sale to a consumer in Mississippi, whether directly or indirectly through an importer, wholesaler, distributor, retailer, or other similar intermediary, is required to complete a product certification for each ENDS product. If approved by the Department, each ENDS product will be added to the Directory, which is available on the Department’s website.

35 Miss. Admin. Code Pt. 8, R. 202 Rule 202

E-cigarettes, e-hookahs, vape pens, electronic pipes, devices, e-liquids, e-liquid pods, disposables, and similar items not listed on the Directory are prohibited from being sold or being made available for sale in Mississippi and are subject to seizure, forfeiture, and destruction. However, zero percent nicotine solution and zero percent (0%) nicotine disposables are not required to be certified and are not listed on the Directory.

35 Miss. Admin. Code Pt. 8, R. 203 Rule 203

Batteries or chargers, when sold separately, are not required to be listed in the Directory.

35 Miss. Admin. Code Pt. 8, R. 204 (Reserved)

35 Miss. Admin. Code Pt. 8, R. 300 Product Certification

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35 Miss. Admin. Code Pt. 8, R. 301 Rule 301

For ENDS products to be included in the Directory, the manufacturer must submit with its product certification the following: 1. An electronic copy of each ENDS product packaging and/or label including the UPC or SKU, brand name, category, description, product name, flavor, product ID type, product ID and the importer of the product; 2. A payment of five hundred dollars ($500.00) for each ENDS product not to exceed fifteen thousand dollars ($15,000.00) per manufacturer annually; and 3. A copy of one (1) of the following: a. The marketing granted order issued by the FDA; b. The acceptance letter issued by the FDA for a timely filed premarket tobacco product application as defined in Paragraph 102 of this Chapter; or c. A document issued by the FDA or by a court confirming that the premarket tobacco product application has received a denial order that has been and remains stayed by the FDA or court order, rescinded by the FDA, or vacated by a court.

35 Miss. Admin. Code Pt. 8, R. 302 Rule 302

ENDS products approved for publication in the Directory must be recertified annually prior to September 1 st of each year. Failure to recertify may result in the products being removed from the registry.

35 Miss. Admin. Code Pt. 8, R. 303 (Reserved)

35 Miss. Admin. Code Pt. 8, R. 400 Modifications to a Product Certification

35 Miss. Admin. Code Pt. 8, R. 401 Rule 401

A manufacturer shall notify the Department within thirty (30) calendar days of any material change to the certification form that affects the ability of the ENDS product to be introduced or delivered into interstate commerce for commercial distribution in the United States.

35 Miss. Admin. Code Pt. 8, R. 402 Rule 402

If 21 USC Section 387j is amended, or subsequent regulations or other official federal guidance or formal policy statement is issued that would change compliance requirements or standards for an ENDS product to become federally compliant, each manufacturer of an ENDS product that is sold for retail sale in Mississippi shall submit documentation substantiating compliance with such new federal requirements or standards within thirty (30) days of the date compliance with such requirement or standard is mandated.

35 Miss. Admin. Code Pt. 8, R. 403 Rule 403

Failure to substantiate compliance with new federal requirements or standards shall be grounds for removal of the manufacturer and its ENDS products from the Directory.

35 Miss. Admin. Code Pt. 8, R. 404 (Reserved)

35 Miss. Admin. Code Pt. 8, R. 500 Product Removal

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35 Miss. Admin. Code Pt. 8, R. 501 Rule 501

Before removing a manufacturer or its ENDS products from the Directory, the Department shall provide the manufacturer with a notice of its intent for removal and an opportunity to come into compliance. Such notice of intent shall state the reason(s) for the intended removal of the manufacturer or its ENDS products.

35 Miss. Admin. Code Pt. 8, R. 502 Rule 502

The manufacturer has fifteen (15) business days from receipt of the notice of intent to resolve the issue stated in such notice or to establish that the manufacturer or its ENDS products should remain in the Directory.

35 Miss. Admin. Code Pt. 8, R. 503 Rule 503

If the manufacturer does not come into compliance after thirty (30) business days of receiving the notice of intent, the Department shall remove the manufacturer or its ENDS products from the Directory.

35 Miss. Admin. Code Pt. 8, R. 504 Rule 504

If an ENDS product is removed from the Directory and is also in the retailer’s inventory at the date of Directory removal, the retailer has thirty (30) days from the date of Directory removal to either sell or remove the products from inventory. These types of products are considered prohibited and subject to seizure, forfeiture, and destruction if not removed from inventory within thirty (30) days from the date of Directory removal.

35 Miss. Admin. Code Pt. 8, R. 505 Rule 505

Prior to selling or distributing ENDS products, manufacturers, retailers, distributors, and wholesalers shall check the Directory periodically to ensure ENDS products have not been removed from the Directory.

35 Miss. Admin. Code Pt. 8, R. 506 (Reserved)

35 Miss. Admin. Code Pt. 8, R. 600 Compliance Checks

35 Miss. Admin. Code Pt. 8, R. 601 Rule 601

Every retailer, distributor, and wholesaler that sells or distributes ENDS products in Mississippi shall be subject to at least two (2) unannounced compliance checks per year by the Department. The Department shall perform an unannounced follow-up compliance check within thirty (30) days of a violation.

35 Miss. Admin. Code Pt. 8, R. 602 (Reserved)

35 Miss. Admin. Code Pt. 8, R. 700 Penalties

35 Miss. Admin. Code Pt. 8, R. 701 Rule 701

A manufacturer that causes ENDS products not listed in the Directory to be sold for retail sale in Mississippi is subject to a civil penalty of two thousand five hundred dollars ($2,500.00) per day for each ENDS product that is offered for sale until such product is removed from the market or properly listed in the Directory.

35 Miss. Admin. Code Pt. 8, R. 702 Rule 702

Any manufacturer that falsely represents any information on the certification form shall be guilty of a misdemeanor for each false representation.

35 Miss. Admin. Code Pt. 8, R. 703 (Reserved)

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35.VIII.5.01 effective May 8, 2026

Part 9 Petroleum Tax

35 Miss. Admin. Code Pt. 9, R. 102 Rule 102

The person importing the gasoline and/or Special Fuel shall report the following information: 1. The type and quantity of the product; 2. The day, the time, and place it will be brought in; 3. The route that will be traveled; and 4. The destination. (The route traveled shall be the most direct route over suitable highways from the point of entry to the destination).

35 Miss. Admin. Code Pt. 9, R. 103 Rule 103

The importer (distributor) shall retain a copy of the Import Notice form for a period of three years.

35 Miss. Admin. Code Pt. 9, R. 104 The importer (distributor) shall account for all Import Notice forms

35 Miss. Admin. Code Pt. 9, R. 105 Rule 105

Any person other than a common or contract carrier, failing to give notice, carrying an incomplete Import Notice, or traveling a different route or at a different time than indicated when the shipment was reported is in violation of this rule and of Miss. Code Ann. Sections 27-55-53 and 27-55-559. The entire amount of the state excise tax upon the gasoline and/or Special Fuel being transported shall be due and payable along with a penalty of twenty-five percent (25%) of such tax. Any agent of the Department or The Mississippi Department of Transportation (MDOT) shall have the right to seize or impound the motor vehicle in which such gasoline and/or Special Fuel is being transported until the excise tax and penalty have been paid. In addition, the Department

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may revoke the distributor's permit to engage in business in this state.

35 Miss. Admin. Code Pt. 9, R. 106 (Reserved)

35.IX.01 revised effective January 16, 2025

Chapter 02 Retail Dealer of Dyed Diesel Fuel

35 Miss. Admin. Code Pt. 9, R. 100 Rule 100

A retail location is any place, other than a Special Fuel Distributor's bulk storage facility, where diesel fuel is sold to the consumer.

35 Miss. Admin. Code Pt. 9, R. 101 Rule 101

When both undyed diesel fuel and dyed diesel fuel are sold at a retail location, separate storage tanks and pumps shall be maintained. The pump used for dispensing the dyed diesel fuel shall not be located on or near the pump island on which the pump used for dispensing undyed diesel fuel is located.

35 Miss. Admin. Code Pt. 9, R. 102 Rule 102

The pump used for dispensing dyed diesel fuel must be marked "NON-HIGHWAY USE" in letters at least one inch (1") in height on a contrasting background.

35 Miss. Admin. Code Pt. 9, R. 103 Rule 103

The operator of the retail location is required to maintain records to substantiate all sales of dyed diesel fuel. Such records shall contain the following: 1. The seller's name; 2. The purchaser's name; 3. The date of sale or delivery; 4. The number of gallons sold; 5. The intended use of the diesel fuel; and 6. If applicable, the Contractor's Direct Pay Permit Number.

35 Miss. Admin. Code Pt. 9, R. 104 (Reserved)

35.IX.02 revised effective September 5, 2026

Chapter 03 Direct Payment of Taxes on Special Fuel to the Department in Lieu of Payment to the Distributor. 100 The Commission may issue Direct Pay Permits to construction contractors if such permit will expedite the proper classification and payment of the applicable taxes on Special Fuel.

35 Miss. Admin. Code Pt. 9, R. 101 Rule 101

No permit may be issued until the applicant has executed and filed with the Department a bond covering all taxes which may accrue under this section. However, the Department may accept a bond filed under Miss. Code Ann. Section 27-65-21 (The contractor's tax bond) when such bond covers the taxes levied on Special Fuel. The issuance of this permit transfers the liability for the tax directly to the permit holder in

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lieu of payment to the distributor and relieves the distributor of the liability for the taxes levied under Miss. Code Ann. Section 27-55-521. The Direct Pay Permit number must appear on all invoices for sales exempted under this section.

35 Miss. Admin. Code Pt. 9, R. 102 Rule 102

This permit is subject to revocation at any time that the Department deems such action is in the best interest of the State.

35 Miss. Admin. Code Pt. 9, R. 103 (Reserved)

35.IX.03 revised effective January 16, 2025.

Part 10 Economic Development

35 Miss. Admin. Code Pt. 10, R. 100 Qualifying for and Calculating the Jobs Tax Credit

35 Miss. Admin. Code Pt. 10, R. 101 Rule 101

Under Miss. Code Ann. Section 57-73-21, income tax credits are available for: 1. Permanent business enterprises primarily engaged in manufacturing, processing, distribution, wholesaling, research and development, warehousing and warehousing activities. 2. Permanent business enterprises designated by rule or regulation of the Mississippi Development Authority (MDA) as air transportation and maintenance facilities, final destination or resort hotels having a minimum of 150 guest rooms, recreational facilities that impact tourism, movie industry studios, telecommunication enterprises, data or information processing enterprises, computer software development enterprises or any technology intensive facility or enterprise.

35 Miss. Admin. Code Pt. 10, R. 102 Rule 102

No business enterprise for the transportation, handling, storage, processing or disposal of hazardous waste is eligible to receive this credit.

35 Miss. Admin. Code Pt. 10, R. 103 Rule 103

The credit is not available to businesses that move from one location within the state to another location within the state without increasing employment. Any business that utilizes the MDA Job Training Grant Fund will not be eligible for the Jobs Tax Credit authorized under Miss. Code Ann. Section 57-73-21.

35 Miss. Admin. Code Pt. 10, R. 104 Rule 104

The jobs tax credit is for each net new full time job created as long as the minimum increase has been achieved and maintained. The minimum increase in jobs necessary to qualify for the credit must occur within 1 year. A full-time job is a job of at least thirty-five (35) hours a week and includes leased employees from an entity that is in the business of leasing employees as long as all other requirements are met. Part-time jobs may not be combined to add up to a full- time job. The credit is based on filled positions and the employees must be employed in this state and subject to Mississippi Withholding Tax. The credit is allowed each year for 5 years beginning in years 2 through 6 after the creation of the job. The year the jobs are created is year 1. The unused portions of the credit can be carried forward for up to 5 years from the

original year in which the excess credit could not be used. The earliest year’s unexpired credit may be used first.

35 Miss. Admin. Code Pt. 10, R. 105 Rule 105

For purposes of this credit, the counties in Mississippi are classified as Tier Three (less developed), Tier Two (moderately developed), and Tier One (developed). The counties are evaluated and ranked each year based on the unemployment rate and per capita income of each county for the most recent 36 month period. They are then divided into the three previously mentioned groups with one-third of the counties in each group. The classification for a specific county can change from year to year based on this evaluation.

35 Miss. Admin. Code Pt. 10, R. 106 Rule 106

This classification is used to determine the minimum number of jobs a business enterprise must create in a given year before it qualifies for the credit. It is also used to determine the amount of credit per job created. The amount of credit per employee and the job levels for each county classification are as follows:

Minimum Annual Increase County Classification in Number of Jobs Credit per Job

Tier One 20 2.50% of payroll Tier Two 15 5.00% of payroll Tier Three 10 10.00% of payroll

35 Miss. Admin. Code Pt. 10, R. 107 Rule 107

If, after qualifying for one five year period, the business increases the number of jobs substantially enough to qualify again for another five year period, they may apply for a second five year period. Each five year period is accounted for separately. Jobs created within an existing five year period that do not meet the minimum number of jobs required to qualify for an additional five year period are allowed to be included within the existing five year period.

35 Miss. Admin. Code Pt. 10, R. 108 Rule 108

After a taxpayer has qualified for the credit, the credit is not allowed for a year if the net employment increase falls below the minimum required for qualification. The credit is only lost for the year(s) that the taxpayer is below the minimum. A recapture of credit taken in previous year(s) is not required. If the taxpayer's employment level increases back above the minimum, then the taxpayer may use the credit for the remainder of the period. However, the original five year period for the credit (years 2 through 6) is not extended. A taxpayer can only earn credit at a given level of employment for a single five (5) year period.

35 Miss. Admin. Code Pt. 10, R. 109 Rule 109

To determine whether a taxpayer with an existing facility has created the minimum number of jobs to qualify for the credit, the taxpayer must compare the average annual employment level for the previous year with the average annual employment in the current year. If the amount of the increase exceeds the minimum required, then the employer will qualify for the credit. This allows the credit for employers who have not constructed a new facility, but have substantially increased employment at an existing facility.

35 Miss. Admin. Code Pt. 10, R. 110 Rule 110

To determine whether a taxpayer with a new facility qualifies for the credit, the average employment for the portion of the year after production was started should be compared with the same period for the previous year. If the increase exceeds the minimum, then the taxpayer will qualify for the credit. For example, a calendar year taxpayer begins doing business in Mississippi and constructs a new facility that begins production on June 1, 2014. To determine whether the taxpayer qualifies for the credit, June through December of 2014 should be compared to June through December of 2013. If the increase meets the minimum requirement, then the taxpayer would qualify for the credit.

35 Miss. Admin. Code Pt. 10, R. 111 Rule 111

The sale, merger, acquisition, reorganization, bankruptcy or relocation from one county to another county within the state of any business enterprise may not create new eligibility in the current or any succeeding business entity, but any unused job tax credit may be transferred and continued by any transferee of the business enterprise. The Commissioner shall determine whether qualifying net increases have occurred or proper transfers of credit have been made and may require the business enterprise to submit such information as needed for substantiation and qualification.

35 Miss. Admin. Code Pt. 10, R. 112 Rule 112

The credit cannot be used by any business enterprise or corporation other than the business enterprise actually qualifying for the credits. Credit received by a partnership, LLC or an S- Corporation may be passed through to offset tax due from the activity that created the credit. The credit is subject to the same limitations that the pass through entity would have had. The tax due on salaries or wages paid by an S-Corporation and guaranteed payments to partners by a partnership cannot be offset by the credit.

35 Miss. Admin. Code Pt. 10, R. 113 Rule 113

The total of the Jobs Tax Credit, the Headquarters Credit and the Research & Development Skills Credit is limited to 50% of the Mississippi income tax liability. These credits may be used in combination with any of the other credits. The credit is not refundable.

35 Miss. Admin. Code Pt. 10, R. 114 Rule 114

Compliance with the equal pay provisions of the federal Equal Pay Act of 1963, the Americans with Disabilities Act of 1990 and the fair pay provisions of the Civil Rights Act of 1964 is required in order to qualify for these credits.

35 Miss. Admin. Code Pt. 10, R. 115 (Reserved)

35 Miss. Admin. Code Pt. 10, R. 200 Same Ownership

35 Miss. Admin. Code Pt. 10, R. 201 Rule 201

If an employer qualified for the credit but then reduced employment levels through layoffs or plant closures, the reduction in employment must continue for a minimum of five (5) years before the employer may use the reduced employment levels in the computation of additional credit. If the reduction in employment is for five (5) years or more, then the employer may requalify for the credit on any additional jobs. If the reduction has continued for less than five (5) years, then the employer may requalify in very limited circumstances. Such situations will be considered on a case by case basis. The taxpayer should submit a letter with a request to receive the credit and a justification for the request. The credit will be granted at the discretion of the Commissioner.

35 Miss. Admin. Code Pt. 10, R. 202 Rule 202

If an employer retains ownership of a facility and replaces some, or all, of the existing equipment, but makes the same or a similar product, then the base employment level is not affected by the equipment replacement. The jobs tax credit would not be available unless a qualifying increase in employment has occurred.

35 Miss. Admin. Code Pt. 10, R. 203 Rule 203

If an employer retains ownership of a facility, suspends operations and retools the production floor with ninety-five percent (95%) new equipment that makes a new product not similar to the old product, then the facility will be treated as a new facility.

35 Miss. Admin. Code Pt. 10, R. 204 Rule 204

If an employer closes an old facility and opens a new facility making the same or a related product, then the employment level at the old facility would be used to determine whether employment increases at the new facility qualify for the jobs tax credit.

35 Miss. Admin. Code Pt. 10, R. 205 (Reserved)

35 Miss. Admin. Code Pt. 10, R. 300 Different Ownership

35 Miss. Admin. Code Pt. 10, R. 301 Rule 301

If an employer sells a plant to a related party, then the related party will be treated the same as the employer. If an employer sells a facility to an unrelated third party, and the new owner continues the old operations, then the new owner must exceed the old owner’s peak employment by a qualifying increase in order to receive any jobs tax credit. If an employer sells a facility to an unrelated third party and the new owner suspends operations to retool the production floor, then the facility will be treated as a new facility for the new owner. However, the retooling must include replacing ninety-five (95%) of the equipment to make a new product that is not similar to the old product.

35 Miss. Admin. Code Pt. 10, R. 302 Rule 302

If an employer ceases operations at a facility for a year or more and sells the facility to an unrelated third party, then the facility will be treated as a new facility for the new owner, even if the same or a similar product is being made. If the new owner has shut down a facility with similar operations at the same time, then the facility will not be treated as a new facility. If a completely different product is being made, the one-year shut down requirement may be shortened. This will be considered on a case by case basis.

35 Miss. Admin. Code Pt. 10, R. 303 Rule 303

If, the new employer requesting the incentive produces a product that was manufactured at a facility in this state that was closed, then the new employer will not earn the jobs tax credit for the new facility unless the employment levels exceeds any previous high at the closed facility. If the employer who owns the new facility is located in this state, it will be able to earn the jobs tax credit, but only to the extent that its level of employment plus the level of the original location (up to any previous high level of employment at the old location before the closing or retooling level) combined is in excess of any previous high level of employment at the original location. The definition of original product will include upgrades and modifications of a normal product line.

35 Miss. Admin. Code Pt. 10, R. 304 Rule 304

A business that acquires an unrelated business enterprise that has ceased operation and laid off all of its employees, and that continues operation of the enterprise in the same or similar type of business as the old owner may be eligible for the credit. The new owner would be eligible for the credit as long as the cessation of the business enterprise by the old owner was not for the purpose of securing new eligibility for the credit.

35 Miss. Admin. Code Pt. 10, R. 305 Rule 305

This credit is authorized under Miss. Code Ann. Section 57-73-21(2), (3) and (4).

35 Miss. Admin. Code Pt. 10, R. 306 (Reserved)

35 Miss. Admin. Code Pt. 10, R. 400 Jobs Tax Credit for Economically Distressed Communities

35 Miss. Admin. Code Pt. 10, R. 401 Rule 401

This credit is available to the same types of businesses which are eligible for the basic Jobs Tax Credit. These businesses must create at least ten (10) new full-time jobs and be located in an area within a city where thirty percent (30%) of the residents are below the national poverty level and where the unemployment rate is 1½ times the national average.

35 Miss. Admin. Code Pt. 10, R. 402 Rule 402

The credit can offset fifty percent (50%) of the income tax liability attributable to the income generated by the operations in this state. 3. The business may choose when to begin taking advantage of the credit, but it must be within five (5) years of the beginning of commercial production. 4. The business must attach a map to the application showing the location of the business inside the economically distressed area. 5. There is no extension of the credit period.

35 Miss. Admin. Code Pt. 10, R. 403 Rule 403

The MDOR must certify the area as an economically distressed community before the Economically Distressed Community Jobs Tax Credit can be taken. For the MDOR to certify an economically distressed community, the city officials must provide the following: 1. A map detailing the area to be certified. 2. A copy of the documentation from the US Census Bureau proving that thirty percent (30%) of the residents are below poverty level. 3. The census tract grouping unemployment rate for the area and the national unemployment rate for the same area for the same time period. 4. The population of the city. After receiving this information, the MDOR will verify the information and, if all requirements are met, will certify the area as an economically distressed community.

35 Miss. Admin. Code Pt. 10, R. 404 Rule 404

This credit is authorized under Miss. Code Ann. Section 27-7-22.27.

35 Miss. Admin. Code Pt. 10, R. 405 (Reserved)

35 Miss. Admin. Code Pt. 10, R. 500 Jobs Tax Credit for Brownfields

35 Miss. Admin. Code Pt. 10, R. 501 Rule 501

This credit is available to any commercial or industrial property owner who incurs costs in the remediation of contaminated property in accordance with the Mississippi Brownfields Voluntary Cleanup and Redevelopment Act. There is no minimum number of new full-time jobs that must be created.

35 Miss. Admin. Code Pt. 10, R. 502 Rule 502

All other requirements, instructions or limitations as previously defined for the basic Jobs Tax Credit in Sections 100 through 300 above apply, except for the following: 1. There is no minimum number of new full-time jobs that must be created, regardless of where the property is located. 2. This Brownfields Jobs Tax Credit cannot be taken in conjunction with the National or Regional Headquarters Credit or the Research and Development Skills Credit. 3. The owner of the brownfields property must attach a copy of the certification from the Commission on Environmental Quality of the completion of the remediation and the amount of cost incurred in the project to the application.

35 Miss. Admin. Code Pt. 10, R. 503 Rule 503

This credit is authorized under Miss. Code Ann. Section 57-73-21(7).

35 Miss. Admin. Code Pt. 10, R. 504 (Reserved)

35 Miss. Admin. Code Pt. 10, R. 600 Jobs Tax Credit for Alternative Energy Suppliers

35 Miss. Admin. Code Pt. 10, R. 601 Rule 601

This credit is for a business engaged in the manufacture or production of alternative energy; 50% of the finished product of the alternative energy project must be derived from resources or products from this state.

35 Miss. Admin. Code Pt. 10, R. 602 Rule 602

All other requirements, instructions or limitations as previously defined for the basic Jobs Tax Credit in Sections 100 through 300 above apply, except for the following: 1. A minimum of 25 new jobs must be created. 2. The amount of credit is equal to $1,000 per new full-time job regardless of where the business is located. 3. The business may choose when to begin taking advantage of the credit, but it must be within five (5) years of the beginning of commercial production. 4. The credit is good for a period of 20 years. 5. The credit can offset 100% of the income tax liability attributable to the income generated by the alternative energy project in this state. 6. The Alternative Energy Jobs Tax Credit cannot be taken in conjunction with the basic Jobs Tax Credit, the National or Regional Headquarters Credit or the Research and Development Skills Credit. 7. An affidavit from the producer describing the resources and products from this state used in the production of the alternative energy and attesting to the truthfulness of the statement must be attached to the application.

35 Miss. Admin. Code Pt. 10, R. 603 Rule 603

This credit is authorized under Miss. Code Ann. Section 27-7-22.29.

35 Miss. Admin. Code Pt. 10, R. 604 (Reserved)

35 Miss. Admin. Code Pt. 10, R. 700 Jobs Tax Credit for Upholstered Household Furniture Manufacturer

35 Miss. Admin. Code Pt. 10, R. 701 Rule 701

This credit is for any business owning or operating an upholstered household furniture manufacturing facility employing new, full-time, cut and sew jobs that did not exist before January 1, 2010.

35 Miss. Admin. Code Pt. 10, R. 702 Rule 702

All other requirements, instructions or limitations as previously defined for the basic Jobs Tax Credit in Sections 100 through 300 above apply, except for the following: 1. There is no minimum number of jobs provision. 2. The amount of credit is equal to $2,000 per new full-time job regardless of where the business is located. 3. The business may choose when to begin taking advantage of the credit, but it must be within five (5) years from the close of the tax year in which the credits were earned. 4. The credit is good for a period of 5 years. 5. The credit can offset up to 100% of the income tax liability of the business each year. 6. The Upholstered Furniture Manufacturer Jobs Tax Credit cannot be taken in conjunction with the basic Jobs Tax Credit, the National or Regional Headquarters Credit or the Research and Development Skills Credit. 7. A description of the items being manufactured and the jobs being performed must be attached to the application. 8. There is no extension of the credit period.

35 Miss. Admin. Code Pt. 10, R. 703 Rule 703

This credit is authorized under Miss. Code Ann. Section 27-7-22.36.

35 Miss. Admin. Code Pt. 10, R. 704 (Reserved)

35 Miss. Admin. Code Pt. 10, R. 800 Applying for the Credit and Claiming the Credit

35 Miss. Admin. Code Pt. 10, R. 801 Rule 801

An application is not required to qualify for the Jobs Tax Credits but may be submitted for review. An application is only required in order lock in the county classification.

35 Miss. Admin. Code Pt. 10, R. 802 Rule 802

If an employer plans to expand its labor forces in a facility in a Tier Three or Tier Two county, then the employer may complete the certification application and make a request in a letter that the current designation of the county be retained. This allows an employer to retain the county designation and the amount of anticipated credit that was in effect for the expansion.

35 Miss. Admin. Code Pt. 10, R. 803 Rule 803

If there is no construction or expansion of a facility, the expansion in labor forces must take place by the end of the following tax year for the certification and county designation to remain valid. If there is a construction or expansion of a facility, it must begin within one (1) year of the certification for the certification and county designation to remain valid. This initial certification applies to the credits covered under the specific certification generated during years two (2) through six (6) after the expansion of labor. This certification to lock in the county’s classification will not be granted retroactively. For subsequent qualification and credit for additional increases in employment, the county designation in effect at that time should be used to determine the qualification and amount of the credit.

35 Miss. Admin. Code Pt. 10, R. 804 Rule 804

For detailed instructions concerning the application process or claiming the credits see the Mississippi Tax Incentives, Exemptions and Credits Book.

35 Miss. Admin. Code Pt. 10, R. 805 (Reserved)

35.X.01 revised effective June 1, 2016.

Chapter 02 National or Regional Headquarters Credit and National or Regional Headquarters Relocation Tax Credit

35 Miss. Admin. Code Pt. 10, R. 100 National or Regional Headquarters Tax Credit

35 Miss. Admin. Code Pt. 10, R. 101 Rule 101

A credit is available to any company transferring or establishing a national or regional headquarters from within or outside the State of Mississippi and creating a minimum of twenty (20) jobs at the headquarters. A credit is also available to any company expanding or making additions to its national or regional headquarters already in Mississippi after January 1, 2013, and creating a minimum of twenty (20) jobs at the headquarters. The minimum increase of twenty (20) jobs must occur within one (1) year.

35 Miss. Admin. Code Pt. 10, R. 102 Rule 102

The amount of the credit is $500.00 for each net new full time employee for the first five (5) years. The amount of the credit is increased to $1,000.00 provided the employee’s salary (excluding benefits not subject to Mississippi income tax) is one hundred twenty-five percent (125%) of the average annual wage of the state. If the employee’s salary (excluding benefits not subject to Mississippi income tax) is two hundred percent (200%) of the average annual wage of the state, the credit is increased to $2,000.00 for that employee. The average annual wage is the most recently published average annual wage as determined by the Mississippi Department of Employment Security.

35 Miss. Admin. Code Pt. 10, R. 103 Rule 103

A full-time employee is an employee who works at least thirty-five (35) hours a week. To be used in the credit computation, the employee must be located in Mississippi and subject to withholding tax. Part-time jobs cannot be combined to add up to a full-time job.

35 Miss. Admin. Code Pt. 10, R. 104 Rule 104

No enterprise in the business of transporting, handling, storing, processing or disposing of hazardous waste is eligible to receive these credits. No regional or national sales office is eligible for these credits.

35 Miss. Admin. Code Pt. 10, R. 105 Rule 105

A national headquarters is that office or location of a multi-state business where managerial, professional, technical and administrative personnel are domiciled and employed. It is the location where the centralized functions such as financial, legal, technical and personnel functions are performed. The function and purpose of the national headquarters is to plan, direct and control all aspects of the organization's operations and it has final authority over all regional offices, operating facilities or any other offices of the business enterprise. The national headquarters is subordinate only to the ownership of the organization or its representatives.

35 Miss. Admin. Code Pt. 10, R. 106 Rule 106

A regional headquarters is one of several management offices or facilities of a multi-state business that is responsible for planning, directing and controlling all aspects of the business operations within a sub-divided area of the United States. A regional headquarters performs a function that is separate from the management of operational facilities within the region. A regional headquarters performs functions similar to the national headquarters, but within a more limited area. It has final authority over all matters within its region and is subordinate only to the national headquarters.

35 Miss. Admin. Code Pt. 10, R. 107 Rule 107

Before the credit is granted, the taxpayer must show that the headquarters will have officers and other high level employees with the support staff normally associated with a headquarters. The support staff for the headquarters is also included in the computation of the credit. The support staff are those full time employees required to assist management and other headquarters personnel to perform functions that are unique to, or required by, the headquarters operation. The classification of support personnel as headquarters employees is dependent on their duties being in direct relationship to the functions of the office or facility and not solely on their physical presence at the location. Employees who are physically present at the location, but whose work is not related to the office functions of the headquarters, such as salesmen, truck drivers, janitors, etc., are not considered headquarters personnel and may not be counted toward the minimum twenty (20) jobs to be created.

35 Miss. Admin. Code Pt. 10, R. 108 Rule 108

Companies that transfer full time headquarters employees into the state that are employed in Mississippi for less than twelve (12) months will be allowed a pro-rated portion of the yearly credit in the first and last years. The amount of the credit is pro-rated based on the number of months the employee is employed in this state divided by twelve (12).

35 Miss. Admin. Code Pt. 10, R. 109 Rule 109

If the number of jobs falls below the twenty (20) required within a year, the credit is lost for that year and cannot be recovered. If the minimum number of jobs is achieved again, the credit is available for the remainder of the original five (5) year period. The original period is not extended.

35 Miss. Admin. Code Pt. 10, R. 110 Rule 110

If the salaries that originally qualified for the additional amount of credit fall below the required average annual state wage, the amount of credit must be adjusted for that year and cannot be recovered. But, if the salaries once again meet the criteria, the additional credit is available for the remainder of the original five (5) year period.

35 Miss. Admin. Code Pt. 10, R. 111 Rule 111

The total of the Jobs Tax Credit, the National or Regional Headquarters Credit, the National or Regional Headquarters Relocation Credit and the Research & Development Skills Credit is limited to fifty percent (50%) of the Mississippi Income Tax liability. The unused portions can be carried forward for up to five (5) years from the original year in which the excess credit could not be used, but you may use the oldest year's unexpired credit first. They may be used in combination with any of the other credits. The credit is not refundable.

35 Miss. Admin. Code Pt. 10, R. 112 Rule 112

The sale, merger, acquisition, reorganization, bankruptcy or relocation from one county to another county within the state of any business enterprise may not create new eligibility in the current or any succeeding business entity, but any unused credit may be transferred and continued by any transferee of the business enterprise. The Department of Revenue shall determine whether qualifying net increases have occurred or proper transfers of credit have been made and may require such information as needed for substantiation and qualification.

35 Miss. Admin. Code Pt. 10, R. 113 Rule 113

35 Miss. Admin. Code Pt. 10, R. 114 Rule 114

If the permanent business enterprise is located in an area that has been declared by the Governor to be a disaster area and as a direct result of the disaster the business enterprise is unable to use the existing carryforward, the Commissioner of the Department of Revenue may extend the period that the credit may be carried forward for a period of time not to exceed two (2) years. The extension must be authorized in writing by the Commissioner.

35 Miss. Admin. Code Pt. 10, R. 115 Rule 115

This credit is authorized under Miss. Code Ann. Section 57-73-21(5).

35 Miss. Admin. Code Pt. 10, R. 116 (Reserved)

35 Miss. Admin. Code Pt. 10, R. 200 National or Regional Headquarters Relocation Tax Credit

35 Miss. Admin. Code Pt. 10, R. 201 Rule 201

A relocation income tax credit is available to any company that transfers or relocates its national or regional headquarters to Mississippi from outside Mississippi in an amount equal to the actual relocation costs paid by the company. A minimum of twenty (20) jobs must be created in order to qualify for the credit.

35 Miss. Admin. Code Pt. 10, R. 202 Rule 202

Relocation costs for which the relocation income tax credit may be taken includes nondepreciable expenses that are necessary to relocate headquarters employees to the national or regional headquarters. These qualified relocation expenses include travel expenses for employees and members of their households to and from Mississippi in search of homes and moving expenses to relocate furnishings, household goods and personal property of the employees and members of their households and other similar nondepreciable relocation expenses.

35 Miss. Admin. Code Pt. 10, R. 203 Rule 203

The relocation credit is applied to the tax year in which the relocation costs are paid. The maximum cumulative amount of tax credits that may be claimed by all taxpayers claiming a relocation tax credit in any one (1) fiscal year cannot exceed One Million Dollars ($ 1,000,000.00), exclusive of credits that might be carried forward from previous years. A company may not receive a credit for the relocation of an employee more than one (1) time in a twelve-month period for that employee.

35 Miss. Admin. Code Pt. 10, R. 204 Rule 204

This credit may be used in combination with any of the other credits. The total of the Jobs Tax Credit, the National or Regional Headquarters Tax Credit, the National or Regional Headquarters Relocation Tax Credit and the Research and Development Skills Tax Credit is

limited to fifty percent (50%) of the income tax liability attributable to the income derived from operations in this state for that year. Any excess credit amount can be carried forward for up to five (5) years from the original year in which the excess credit could not be used. The credit is not refundable.

35 Miss. Admin. Code Pt. 10, R. 205 Rule 205

35 Miss. Admin. Code Pt. 10, R. 206 Rule 206

This credit is authorized under Miss. Code Ann. Section 57-73-21(7).

35 Miss. Admin. Code Pt. 10, R. 207 (Reserved)

35 Miss. Admin. Code Pt. 10, R. 300 Applying for the Credits and Claiming the Credits

35 Miss. Admin. Code Pt. 10, R. 301 Rule 301

To apply for the credits, an Application for Certification of Economic Incentives and a letter requesting the credit must be submitted. The letter must contain sufficient information to allow a determination of whether the location qualifies as a national or regional headquarters. A list of eligible relocation expenses must be provided when applying for the National or Regional Headquarters Relocation Tax Credit. A letter will be issued informing the taxpayer if the applicable credit is granted.

35 Miss. Admin. Code Pt. 10, R. 302 Rule 302

35 Miss. Admin. Code Pt. 10, R. 303 Rule 303

For detailed instructions concerning the application process or claiming the credits see the Mississippi Tax Incentives, Exemptions and Credits Book.

35 Miss. Admin. Code Pt. 10, R. 304 (Reserved)

Chapter 03 Research and Development Skills Credit

35 Miss. Admin. Code Pt. 10, R. 100 Rule 100

Under Miss. Code Ann. Section 57-73-21(6), a credit of $1,000.00 is available for the first five (5) years for each net new full-time employee in any job requiring research and development skills. The employee must be engaged in research and development activities. Qualification of jobs for this credit would require at a minimum, a Bachelor’s degree in a scientific or technical field of study from an accredited four (4) year college or university, employment in the employees’ area of expertise, compensation at a professional level and two (2) years of related job experience. Examples are chemists and engineers.

35 Miss. Admin. Code Pt. 10, R. 101 Rule 101

This credit is available to most companies regardless of the business in which it engages. However, no business enterprise for the transportation, handling, storage, processing or disposal of hazardous waste is eligible to receive this credit.

35 Miss. Admin. Code Pt. 10, R. 102 Rule 102

A full time employee is an employee who works at least thirty-five (35) hours a week. The employees must be located in Mississippi and subject to Mississippi withholding tax. Part-time positions cannot be combined to add up to a full-time position.

35 Miss. Admin. Code Pt. 10, R. 103 Rule 103

If the employee is employed in Mississippi for less than twelve (12) months, credit will be allowed for a pro-rated portion of the yearly credit in the first and last years. The amount of the credit is pro-rated based on the number of months the employee is employed in this state divided by twelve (12).

35 Miss. Admin. Code Pt. 10, R. 104 Rule 104

The total of the Jobs Tax Credit, the National or Regional Headquarters Credit, the National or Regional Headquarters Relocation Credit and the Research & Development Skills Credit is limited to 50% of the Mississippi Income Tax liability. The unused portions can be carried forward for up to (5) years from the original year in which the excess credit could not be used. This credit may be used in combination with any of the other credits and is not refundable.

35 Miss. Admin. Code Pt. 10, R. 105 Rule 105

The sale, merger, acquisition, reorganization, bankruptcy or relocation from one county to another county within the state of any business enterprise may not create new eligibility in the current or any succeeding business entity, but any unused credit may be transferred and continued by any transferee of the business enterprise. A letter detailing the facts surrounding such an occurrence and requesting a ruling on the eligibility of any credits must be presented to the Department to determine whether qualifying net increases have occurred or proper transfers of credit have been made.

35 Miss. Admin. Code Pt. 10, R. 106 Rule 106

The credit cannot be used by any business enterprise or corporation other than the business enterprise actually creating the jobs qualifying for the credits. Credit received by a partnership, LLC or an S-Corporation may be passed through to offset tax due from the activity that created the credit. The credit is subject to the same limitations that the pass through entity would have had. The tax due on salaries or wages paid by an S-Corporation and guaranteed payments to partners by a partnership cannot be offset by the credit.

35 Miss. Admin. Code Pt. 10, R. 107 Rule 107

Compliance with the equal pay provisions of the federal Equal Pay Act of 1963, the Americans with Disabilities Act of 1990 and the fair pay provisions of the Civil Rights Act of 1964 is required.

35 Miss. Admin. Code Pt. 10, R. 108 Rule 108

An application is not required in order to take this credit but may be submitted for review. The taxpayer may apply for certification of the credit by submitting the Application for Certification of Economic Development along with a letter requesting the credit. The letter should contain sufficient information to allow a determination of whether the employee qualifies for the credit

35 Miss. Admin. Code Pt. 10, R. 109 Rule 109

For detailed instructions concerning the application process or claiming the credits see the Mississippi Tax Incentives, Exemptions and Credits Book.

35 Miss. Admin. Code Pt. 10, R. 110 Rule 110

This credit is authorized under Miss. Code Ann. Section 57-73-21(6)

35 Miss. Admin. Code Pt. 10, R. 111 (Reserved)

Chapter 04 Basic Skill Training or Retraining Tax Credit

35 Miss. Admin. Code Pt. 10, R. 100 Rule 100

An income tax credit is allowed to employers that are: 1. Permanent business enterprises primarily engaged in manufacturing, processing, distribution, wholesaling, research and development and warehousing. 2. Permanent business enterprises designated by rule or regulation of the Mississippi Development Authority as air transportation and maintenance facilities, final destination or resort hotels having a minimum of (one hundred fifty) 150 guest rooms, recreational

facilities that impact tourism, movie industry studios, telecommunication enterprises, data or information processing enterprises, computer software development enterprises or any technology intensive facility or enterprise. 3. Employers that have qualified for the national or regional headquarters credit.

35 Miss. Admin. Code Pt. 10, R. 101 Rule 101

The credit allowed is fifty percent (50%) of qualified expenses, not to exceed fifty percent (50%) of the income tax liability. Any excess credit will not be refunded, but may be carried forward for up to five (5) years. The program must be certified for a specific number of years not to exceed five (5) years. The credit may offset up to fifty percent (50%) of the income tax due. It may be used in combination with any of the other credits. The training or retraining credit cannot exceed $2,500 in the aggregate per employee for a three (3) year period.

35 Miss. Admin. Code Pt. 10, R. 102 Rule 102

To qualify for the credit, the basic skills training or retraining must be offered through, or be approved by, the community or junior college in the district where the business is located. Employers must be certified as eligible for the tax credit by the local community or junior college that serves the employer and the Mississippi Department of Revenue. The training does not have to be on the community or junior college campus to qualify if it is sponsored and approved by the college. A copy of the certification must be furnished to the Department of Revenue by the taxpayer when the certification is granted. When a return is filed on which the credit is taken, a schedule showing the expenses and computation of the credit and a copy of the certification must be attached to the return.

35 Miss. Admin. Code Pt. 10, R. 103 Rule 103

The credit may be available for basic skills training that enhances reading, writing or math skills up to the twelfth (12 th ) grade level for employees who are unable to function effectively on the job due to deficiencies in these areas or who would be displaced because such deficiencies will inhibit their training for new technology. The credit may also be available for retraining programs for hourly employees who have been employed for a minimum of one (1) year by the employer that, upon successful completion, increase the employee’s opportunity for consideration for promotion or retention with the employer. For either type of training to qualify for the credit, it must be job-related and increase opportunities for employee advancement or retention.

35 Miss. Admin. Code Pt. 10, R. 104 Rule 104

Employers may contact the Mississippi Community College Board Office of Workforce Education for a list of Community Colleges and the cities where the main campuses are located at:

Office of Workforce Education Mississippi Community College Board 3825 Ridgewood Road Jackson, MS 39211 (P) 601-432-6519 (F) 601-432-6365

35 Miss. Admin. Code Pt. 10, R. 105 Rule 105

The credit is applied to qualified training or retraining expenses, which are expenses related to instructors, instructional materials and equipment and the construction and maintenance of facilities by the employer that are designated for training or retraining provided through such community or junior college or training approved by such community or junior college. The qualified expenses are net of any reimbursement.

35 Miss. Admin. Code Pt. 10, R. 106 Rule 106

Tuition reimbursement programs will qualify as long as they are related to the employee’s job and there is an agreement between the employer and employee that the employee must work for the employer for a reasonable period of time after the tuition reimbursement program has been completed so that the training may be utilized. The expenses that qualify are net of any reimbursement or paybacks to the employer. If an employee begins a program and is terminated for cause by the employer, the employer does not have to recapture the amount previously taken as a credit, unless the employee has to repay the employer. If so, the employer has to recapture those amounts.

35 Miss. Admin. Code Pt. 10, R. 107 Rule 107

The credit cannot be used by any business enterprise or corporation other than the business enterprise actually qualifying for the credit. Credit received by a partnership, LLC or S- Corporation may be passed through to offset tax due from the activity that created the credit. The credit is subject to the same limitations that the pass-through entity would have had. The tax due on salaries or wages paid by an S-Corporation and guaranteed payments to partners by a partnership cannot be offset by the credit.

35 Miss. Admin. Code Pt. 10, R. 108 Rule 108

The credit is not refundable. An expense cannot be used both as a credit and a deduction. If a credit is based on an expense, then the amount of the credit taken must be added back to Mississippi taxable income in the year the credit is used.

35 Miss. Admin. Code Pt. 10, R. 109 Rule 109

This credit is authorized under Miss. Code Ann. Section 57-73-25, as amended.

35 Miss. Admin. Code Pt. 10, R. 110 (Reserved)

35 Miss. Admin. Code Pt. 10, R. 111 (Reserved)

Chapter 05 Rural Economic Development (Red) Credit

35 Miss. Admin. Code Pt. 10, R. 100 Rule 100

An income tax credit is available for debt service on certain bonds issued by the Mississippi Business Finance Corporation. Debt service may include the total amount paid to service the debt. This credit is also known as the Mississippi Business Finance Corporation Revenue Bond Service Credit.

35 Miss. Admin. Code Pt. 10, R. 101 Rule 101

Only debt service paid on revenue bonds issued by the Mississippi Business Finance Corporation to finance economic development projects to induce the location of manufacturing facilities within this state can be taken as a credit. This credit can be used against the taxes due from the income generated by or arising out of the economic development project. The bonds that qualify for this credit are the bonds issued under the authority of Sections 57-10-401 through 57-10-439 of the Mississippi Code of 1972.

35 Miss. Admin. Code Pt. 10, R. 102 Rule 102

For more information on the benefits of this program contact the Mississippi Development Authority, Post Office Box 849, Jackson, MS 39205-0849.

35 Miss. Admin. Code Pt. 10, R. 103 Rule 103

This credit has been amended several times and the credit carry forward periods will vary. Currently, excess credits may be carried forward to the three (3) succeeding years following the year in which the credit was earned. The credit is limited to eighty percent (80%) of the income tax due on income generated by the economic development project that gave rise to the credit. This income is determined by a formula adopted by the Mississippi Business Finance Corporation. It may be used in combination with any of the other credits.

35 Miss. Admin. Code Pt. 10, R. 104 Rule 104

35 Miss. Admin. Code Pt. 10, R. 105 Rule 105

35 Miss. Admin. Code Pt. 10, R. 106 Rule 106

To apply for this credit: You do not have to apply for this credit, but you must attach a schedule of computation of the current year's credit and expenses that created the credit. You must also attach a schedule of credits used in prior years with any carry forward amounts showing the amounts used and carried forward by year.

35 Miss. Admin. Code Pt. 10, R. 107 Rule 107

This credit is authorized under Section 27-7-22.3 of the Mississippi Code of 1972, as amended.

35 Miss. Admin. Code Pt. 10, R. 108 This regulation is effective January 1, 2001

35 Miss. Admin. Code Pt. 10, R. 109 (Reserved)

35 Miss. Admin. Code Pt. 10, R. 110 (Reserved)

Chapter 06 Ad Valorem Credit

35 Miss. Admin. Code Pt. 10, R. 100 Rule 100

An income tax credit is available for ad valorem tax paid on commodities, goods, wares and merchandise held for resale by manufacturers, distributors, and wholesale or retail merchants. The credit is limited to the lesser of $5,000.00 per location or the income tax attributable to the location. For the credit to be taken, the ad valorem tax must be determined by specific location. Within these limitations, this credit may offset up to one hundred percent (100%) of the income tax due. It may be used in combination with any of the other credits.

35 Miss. Admin. Code Pt. 10, R. 101 Rule 101

The credit may be claimed only in the tax year in which the ad valorem taxes are paid. A carry forward is not available.

35 Miss. Admin. Code Pt. 10, R. 102 Rule 102

A copy of the tax receipt from the county, city or school district that shows the inventory valuation and a schedule showing the calculation by location of the ad valorem tax paid based on the valuation must be attached to the return.

35 Miss. Admin. Code Pt. 10, R. 103 Rule 103

35 Miss. Admin. Code Pt. 10, R. 104 Rule 104

35 Miss. Admin. Code Pt. 10, R. 105 Rule 105

To apply for this credit: You do not have to apply for this credit ahead of time, but you must attach a copy of the tax receipt to your return to claim this credit. If you have more than five (5) locations, you should attach five (5) receipts and a schedule of all receipts including the ones attached.

35 Miss. Admin. Code Pt. 10, R. 106 Rule 106

This credit is authorized under Miss. Code Ann. Section 27-7-22.5, as amended.

35 Miss. Admin. Code Pt. 10, R. 107 (Reserved)

Chapter 07 Child/Dependent Care Credit

35 Miss. Admin. Code Pt. 10, R. 100 Rule 100

An income tax credit is allowed to any employer providing dependent care for its employees during the employee's working hours. The credit allowed is 25% of qualified expenses. Starting January 1, 1998 the credit allowed is 50% of qualified expenses. This credit can offset up to 100% of the income tax due from the entity. Any excess credit will not be refunded, but can be carried forward for up to five (5) years.

35 Miss. Admin. Code Pt. 10, R. 101 Rule 101

An employer must have its child care program certified by the Department of Health for programs serving children twelve (12) years of age or younger and for programs serving elderly adults. The State Tax Commission certifies programs serving dependents older than twelve (12) years of age. To request certification from the Tax Commission, the employer should submit a letter explaining the employer's child care program and specifically requesting certification for child care credit. A copy of the certification from the Department of Health must be furnished by the taxpayer to the Tax Commission when the certification is granted. Information concerning the Department of Health's certification may be obtained at the following office: Mississippi State Department of Health, Division of Child Care and Special Licensure, Post Office Box 1700, Jackson, MS 39215-1700.

35 Miss. Admin. Code Pt. 10, R. 102 Rule 102

To qualify, the facility must have an average daily enrollment for the taxable year of no less than six (6) children who are twelve (12) years of age or younger and be licensed according to the regulations governing licensure of child care facilities in Mississippi; or must serve five (5) or fewer children and/or elderly adults in a family child care/elder care home approved by the Department of Health for participation in the United States Department of Agriculture child and adult nutrition program; or must serve children over twelve (12) years of age but less than eighteen (18) years of age in either a community-based facility or a facility at the employment site; or must serve adult relatives of employees in either a community based elder-care facility or a facility at the employment site; or must serve children or adult dependents having physical, emotional or mental disabilities in either a community-based facility or a facility at the employment site.

35 Miss. Admin. Code Pt. 10, R. 103 Rule 103

The net cost of any contract executed by the employer for a third party to provide dependent care is a qualified expense. If the employer elects to provide dependent care directly, then the qualified expenses are expenses for staff, learning and recreational materials and equipment, and cost associated with the construction and maintenance of a facility. Additional eligible expenses include costs assumed by the employer which increases the quality, availability and affordability of dependent care in the community used by employees during the employee's work hours. For facilities and equipment, the eligible expense is the amount of depreciation expense allowable in computing taxable income. These cost are net of any reimbursement.

35 Miss. Admin. Code Pt. 10, R. 104 Rule 104

Any unused credit may be carried over for 5 years. An expense cannot be used both as a deduction and as the basis for a credit. Any expense used in computing the allowable credit

cannot be taken as a deduction. The expense must be added back to Mississippi taxable income.

35 Miss. Admin. Code Pt. 10, R. 105 Rule 105

35 Miss. Admin. Code Pt. 10, R. 106 Rule 106

The credit is not refundable. The Child Care Credit may offset up to 100% of the tax due. It may also be used in combination with any of the other credits.

35 Miss. Admin. Code Pt. 10, R. 107 Rule 107

To apply for this credit: You must have had your program previously certified and have furnished a copy of the certification to the Tax Commission. You must attach a schedule showing the computation to the return. 108 This credit is authorized under Section 57-73-23 of the Mississippi Code of 1972, as amended.

35 Miss. Admin. Code Pt. 10, R. 109 This regulation is effective January 1, 2001

35 Miss. Admin. Code Pt. 10, R. 110 (Reserved)

35 Miss. Admin. Code Pt. 10, R. 111 (Reserved)

Chapter 08 Export Port Charges Credit

35 Miss. Admin. Code Pt. 10, R. 100 Rule 100

An income tax credit is available to taxpayers that utilize port facilities at Mississippi state, county and municipal ports or harbors as established pursuant to Miss. Code Ann. Sections 59- 5-1 through 59-5-69, Sections 59-7-1 through 59-7-519, Sections 59-9-1 through 59-9-85 or Sections 59-11-1 through 59-11-7.

35 Miss. Admin. Code Pt. 10, R. 101 Rule 101

The amount of credit allowed shall be the total of export cargo charges paid on receiving into the port, handling to a vessel and wharfage. This credit shall not exceed fifty percent (50%) of the income tax reduced by the sum of all other credits, except credits for tax payments. Any excess credit will not be refunded, but can be carried forward for up to five (5) years.

35 Miss. Admin. Code Pt. 10, R. 102 Rule 102

The credit cannot be used by any business enterprise or corporation other than the business enterprise that incurred the expenses. Credit received by a partnership, LLC or an S Corporation may be passed through to offset tax due from the activity that created the credit. The credit is subject to the same limitations that the pass through entity would have had. The tax due on salaries or wages paid by an S Corporation and guaranteed payments to partners by a partnership cannot be offset by the credit.

35 Miss. Admin. Code Pt. 10, R. 103 Rule 103

35 Miss. Admin. Code Pt. 10, R. 104 Rule 104

To obtain the credit, the taxpayer must provide to the Mississippi Department of Revenue, a statement from the governing authority of the port certifying the amount of charges paid by the taxpayer for which credit is claimed.

35 Miss. Admin. Code Pt. 10, R. 105 Rule 105

For detailed instructions concerning the application process or claiming the credits see the Mississippi Tax Incentives, Exemptions and Credits Book.

35 Miss. Admin. Code Pt. 10, R. 106 Rule 106

This credit is authorized under Miss. Code Ann. Section 27-7-22.7.

35 Miss. Admin. Code Pt. 10, R. 107 (Reserved)

35.X.09 revised effective August 3, 2019

Chapter 09 Motion Picture Production Tax Incentive

35 Miss. Admin. Code Pt. 10, R. 100 Definitions

35 Miss. Admin. Code Pt. 10, R. 101 Rule 101

A motion picture production company (MPPC) is one that produces a nationally distributed motion picture, video, DVD, television program or series, commercial, or computer or video game. This includes a company engaged in the business of making such productions using animation, interactive media, preproduction and postproduction 3D applications, video game cinematics, virtual production, visual effects, and motion capture within the fields of feature film, television, commercials and games. The production of news or athletic events do not qualify, nor does any project that contains any material or performance deemed obscene as defined in Miss. Code Ann. Section 97-29-103. The company cannot have defaulted on any state loan or have declared bankruptcy where a state obligation had been discharged because of the bankruptcy.

35 Miss. Admin. Code Pt. 10, R. 102 Rule 102

A Mississippi vendor is a business that either owns an office building in Mississippi or has signed a lease for office space in Mississippi for at least a year, has at least one employee stationed full time at the Mississippi office, is registered with the Secretary of State, is known in the trade as a vendor active in the relevant line of business and advertises as a Mississippi vendor.

35 Miss. Admin. Code Pt. 10, R. 103 Rule 103

An employee is defined as an individual directly involved in the physical production and/or post-production of a motion picture produced in this state and who is employed by a MPPC, personal service corporation or loan out company.

35 Miss. Admin. Code Pt. 10, R. 104 Rule 104

Payroll is defined as salary, wages or other compensation including related benefits paid to Mississippi resident employees upon which Mississippi income tax is due and has been withheld.

35 Miss. Admin. Code Pt. 10, R. 105 Rule 105

Fringes means costs paid by a MPPC for Mississippi resident employee benefits that are not subject to state income tax. Fringes may include, but are not limited to, payments by an employer for unemployment insurance, Federal Insurance Contribution Act (FICA), workers' compensation insurance, pension and welfare benefits and health insurance premiums.

35 Miss. Admin. Code Pt. 10, R. 106 Rule 106

A Mississippi resident is defined as a person domiciled in Mississippi or who has maintained a permanent home in this state and spends in the aggregate more than six (6) months each year within the state. Proof of domicile or maintenance of a permanent home includes valid Mississippi driver’s license, Mississippi voter registration, valid Mississippi car tag, or homestead exemption.

35 Miss. Admin. Code Pt. 10, R. 107 (Reserved)

35 Miss. Admin. Code Pt. 10, R. 200 General

35 Miss. Admin. Code Pt. 10, R. 201 Rule 201

The Motion Picture Production Tax rebate is based on the amount of the base investment made in Mississippi and Mississippi resident payroll and fringes as defined in Miss. Code Ann. Section 57-89-3. The rebate is available for a MPPC that expends at least $50,000 in base investment, payroll and/or fringes, in this state on a production certified by the Mississippi Development Authority. The amount of the rebate is twenty-five percent (25%) of the base investment made and expended in this state. Payroll and fringes for a Mississippi resident is eligible for a thirty percent (30%) rebate. An additional five percent (5%) rebate is available for payroll of honorably discharged veterans. Purchases made before the MDA approval date are not included in the rebate. Only eligible expenses purchased by the MPPC associated with the MDA certified project will be allowed for the rebate.

35 Miss. Admin. Code Pt. 10, R. 202 Rule 202

The total amount of rebates authorized for a motion picture production will not exceed $10,000,000 in the aggregate and the total amount of rebates authorized in any fiscal year will not exceed $20,000,000 in the aggregate.

35 Miss. Admin. Code Pt. 10, R. 203 Rule 203

The MPPC is responsible for registering with the proper state authorities to legally conduct business within this state. This includes the Mississippi Department of Employment Security, Mississippi Worker’s Compensation Commission, Mississippi Secretary of State, etc.

35 Miss. Admin. Code Pt. 10, R. 204 Rule 204

The MPPC is responsible for registering for a withholding tax account and reporting any withholding tax due on this account.

35 Miss. Admin. Code Pt. 10, R. 205 (Reserved)

35 Miss. Admin. Code Pt. 10, R. 300 Base Investment

35 Miss. Admin. Code Pt. 10, R. 301 Rule 301

Base investment includes purchases of goods and services from Mississippi vendors, as defined above, housing, housing allowances, food, rental of equipment, dry cleaning, per diem and anything else that the MPPC spends in Mississippi that is related to the production.

35 Miss. Admin. Code Pt. 10, R. 302 Rule 302

Purchases of services and tangible personal property must be made from a Mississippi Vendor, as defined above, to qualify for the rebate. Payments made to out of state independent contractors or vendors for tangible personal property and services do not qualify for the rebate. Purchases of services from a vendor must satisfy the following five criteria to be eligible for the rebate: 1. The vendor must qualify as a Mississippi vendor; 2. The service must be wholly performed in this state; 3. The payment may not be for a qualified personnel expenditure; 4. The service must be directly attributable to the production; and 5. The transaction must be subject to taxation in this state.

35 Miss. Admin. Code Pt. 10, R. 303 Rule 303

Items that do not qualify as base investment: 1. Online purchases, regardless if Mississippi sales tax is charged 2. Postage 3. Mileage 4. Bank fees

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Credit Card fees 6. Taxes 7. Personal Expenditures 8. Out of state expenses billed through a Mississippi pass through company. 9. Any other items that do not meet the definition of base investment.

35 Miss. Admin. Code Pt. 10, R. 304 Rule 304

Airline tickets must be purchased through a Mississippi travel agent and the sales invoice must indicate the airports in which the flight departed and arrived. Airports located in Mississippi or one of the following cities are eligible for the rebate: 1. Memphis, TN 2. New Orleans, LA 3. Baton Rouge, LA 4. Mobile, AL

35 Miss. Admin. Code Pt. 10, R. 305 Rule 305

Location rentals for housing or a set should include the Vendor/Owner name, address of the rental property, description of use, dates used, and a copy of payment.

35 Miss. Admin. Code Pt. 10, R. 306 Rule 306

Items purchased during production that are sold in Mississippi at the end of production must be decreased by the sales price of the item before being included in the rebate.

35 Miss. Admin. Code Pt. 10, R. 307 Rule 307

Contract labor paid to a Mississippi resident is eligible for a twenty-five percent (25%) rebate, while non-resident contract labor is not eligible for the rebate. A rebate request for contract labor should include the name of the individual, city of residence, social security number, copy of payment and a link to an image of Form 1099, if applicable, journals and any other supporting documentation.

35 Miss. Admin. Code Pt. 10, R. 308 Rule 308

Purchases of property or services from a local vendor who has acquired the property or services from out of state may qualify for the rebate if: 1. The Mississippi vendor is regularly engaged in the business of providing that same type of good or service. 2. The Mississippi vendor is a permanent business enterprise; and 3. The Mississippi vendor’s sales to the motion picture production company are at an arm’s length basis as evidenced by an added markup that is consistent with industry norms. The MPPC must not provide any assistance to the local vendor in providing the services or tangible personal property.

35 Miss. Admin. Code Pt. 10, R. 309 Rule 309

The use of a local production company to provide goods and services may also qualify for the rebate if the local production company meets the requirements in Paragraph 308 above and the company was not established specifically for the needs of any one production.

35 Miss. Admin. Code Pt. 10, R. 310 Rule 310

Petty cash and reimbursement expenses may qualify for the rebate if the documentation provided in the rebate request includes a reconciliation of the expenses allowed by the MPPC (e.g., Petty Cash top sheet or reimbursement/check purchase order), copies of invoices or receipts, and payment information. Examples of expenses that may qualify for the rebate include meals, gas, office supplies, set design, art department expenses

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and other similar production related expenses.

35 Miss. Admin. Code Pt. 10, R. 311 Rule 311

In the case of a motion picture production company, or its owner, principal, member, production partner, independent contractor director or producer, or subsidiary company that (i) is designated and pre-qualified by the Mississippi Development Authority as Mississippi-based or a Mississippi resident; (ii) has filed income taxes in the State of Mississippi during each of the previous three (3) years; and (iii) has engaged in activities related to the production of at least two (2) motion pictures in Mississippi during the past ten (10) years, base investment may include payroll and fringes paid for any employee who is not a resident and whose wages are subject to the Mississippi Income Tax Withholding Law of 1968, if so requested by the motion picture production company. A motion picture production company must submit such a request to the Mississippi Development Authority at the time the company applies for approval as a state-certified production. If base investment includes payroll and fringes, and the payroll and fringes paid for an employee exceeds Five Million Dollars ($5,000,000.00), then only the first Five Million Dollars ($5,000,000.00) of such payroll and fringes may be included in base investment.

35 Miss. Admin. Code Pt. 10, R. 312 (Reserved)

35 Miss. Admin. Code Pt. 10, R. 400 Payroll

35 Miss. Admin. Code Pt. 10, R. 401 Rule 401

If the eligible production has physical production or postproduction activities both inside and outside the state, the rebate will only be allowed on a prorated amount of the eligible payroll based on the percentage of activities performed in Mississippi. Source documentation should include a journal indicating time worked between states.

35 Miss. Admin. Code Pt. 10, R. 402 Rule 402

An individual who is hired through a loan out company or a temporary staffing company will be considered an employee if the loan out company or temporary staffing company is withholding Mississippi tax, otherwise, the individual will be treated as a contract employee. Loan out companies will be able to claim the withholding as an estimated payment on their Mississippi income tax return. Loan out companies must contact the MDOR before filing the return to ensure that there will not be a delay or problem in regard to the withholding being claimed as an estimated payment.

35 Miss. Admin. Code Pt. 10, R. 403 Rule 403

Payments made to personal service corporations may qualify for the rebate if Mississippi income tax has been withheld and remitted.

35 Miss. Admin. Code Pt. 10, R. 404 Rule 404

Payroll fees paid to Mississippi payroll companies qualify for the rebate.

35 Miss. Admin. Code Pt. 10, R. 405 Rule 405

If the payroll and fringes paid for an employee exceeds $5,000,000, then the rebate is only authorized for the first $5,000,000 of the single employee’s payroll and fringes.

35 Miss. Admin. Code Pt. 10, R. 406 Rule 406

The production company may receive an additional 5% of the wages payroll and fringes paid for an employee who is an honorably discharged veteran of the United States Armed Forces upon which Mississippi income tax is due and has been withheld. A

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copy of Federal Form DD 214 Proof of Military Service is required to qualify for the additional 5%.

35 Miss. Admin. Code Pt. 10, R. 407 (Reserved)

35 Miss. Admin. Code Pt. 10, R. 500 Audit by MDOR

35 Miss. Admin. Code Pt. 10, R. 501 Rule 501

To claim the rebate by submitting the request to the MDOR, the motion picture company must submit an electronic Excel spreadsheet upon completion of the project containing a detailed accounting of the base investment and the employee payroll to the MDOR in the proper format. The base investment tab must include a listing of purchase invoices showing the name and address of the vendor, date, description of items purchased, and the amount of expenditures made to those vendors. Proper documentation to prove payment by the MPPC that was certified for the rebate is also required. This includes copies of bank statements, credit card statements and any other form of payment used to purchase items eligible for the rebate. Include at what stage of production the purchase was made: Preproduction, Production or Postproduction. Each location should be grouped together by date for productions that take place in more than one location.

35 Miss. Admin. Code Pt. 10, R. 502 Rule 502

The payroll tab should list residents of Mississippi, including social security numbers, names, addresses, W-2s, a breakdown of the amount of wages paid to and withheld from those individuals, employee benefits and employer fringes. The payroll documentation should include a payroll detail with a breakdown of wages, employee benefits and employer fringes by employee.

35 Miss. Admin. Code Pt. 10, R. 503 Rule 503

All tabs of the spreadsheet must contain links to the PDF files of all source documentation contained in the rebate request. All source documentation must be kept for verification and additional documentation may be requested. The MDOR conducts a line-by-line review of the spreadsheet submission. The rebate request (in the form of an Excel spreadsheet) and PDF files are to be submitted to the MDOR on an USB Flash Drive (USB) and mailed to: Mississippi Department of Revenue, Office of Tax Policy, P.O. Box 22828, Jackson, MS 39215.

35 Miss. Admin. Code Pt. 10, R. 504 Rule 504

Maintain a copy of the USB submission in case a USB is lost or damaged in the mail. In addition, due to the agency’s data security policies, any USB received by the Department cannot be returned to its original sender or the representatives of the production company. It is recommended that the USB be password protected due to the sensitive information contained within and that the password be emailed to the Department rather than being enclosed with the USB on a letter or written note.

35 Miss. Admin. Code Pt. 10, R. 505 Rule 505

When the rebate request is received the MDOR will determine if the submission is in the proper format to perform the review. If the request is not in the proper format, it will be sent back with an explanation containing the formatting requirements that were not met. The rebate request will be denied if a suitable submission is not received within six

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(6) months. A rebate request that is submitted in the proper format will be reviewed and the review will be sent to the MPPC. The MPPC must respond to the MDOR review or any subsequent reviews within six (6) months. If there is no response in the form of additional documentation or agreement to the rebate amount, then the qualifying rebate amount will be paid out and the remaining request will be denied. When a rebate request is denied the MPPC should review their appeal rights located at www.dor.ms.gov. The MDOR will review any additional information provided by the MPPC for a period of one year from the denial date.

35 Miss. Admin. Code Pt. 10, R. 506 Rule 506

After reviewing and approving the rebate request, the MDOR will issue the rebate check to the certified production company. The rebate check is not transferrable.

35 Miss. Admin. Code Pt. 10, R. 507 (Reserved)

35 Miss. Admin. Code Pt. 10, R. 600 Audit by CPA

35 Miss. Admin. Code Pt. 10, R. 601 Rule 601

The MPPC may also claim the rebate by engaging a CPA. The CPA will need to perform the audit of the MPPC's production expenditures, and such CPA shall verify each base investment, payroll, and fringes expenditure.

35 Miss. Admin. Code Pt. 10, R. 602 Rule 602

Requirements for a CPA engaged to perform a Motion Picture Incentive Submission Audit: 1. Contact the Mississippi Department of Revenue (MDOR) at 601-923-7440 once the audit is agreed to. The MDOR will provide a document containing language to be included in the audit submission. 2. Read the Motion Picture Production Incentive section of the most current Mississippi Tax Incentives, Exemptions and Credits Book at https://www.dor.ms.gov/Pages/Business-Incentive.aspx. 3. Both the verifying and reviewing CPAs must attest to conducting two (2) levels of review either within the CPA firm or as a cooperative endeavor for the review of the audit. 4. Supply notarized statements confirming that the CPAs are independent from any other activities related to the film project audited. 5. Provide a copy of both CPAs’ licenses. 6. Provide a copy of the CPA firms’ permits. 7. Both the verifying and reviewing CPAs must attest to completing twenty (20) hours of CPE each reporting cycle. 8. Verify supporting documentation for each individual expenditure claimed by the MPPC. 9. Work with the production company to resolve exceptions or discrepancies prior to submission to the Mississippi Department of Revenue (DOR). 10. Attest that all amounts on the rebate submission request are properly calculated and documented. 11. Find that the MPPC expended at least fifty thousand dollars ($50,000) in base investment, payroll and/or fringes in the State of Mississippi. 12. Find that no one employee exceeds five million dollars ($5,000,000) in payroll and

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fringes. 13. Verify that only eligible expenses incurred and paid for after the Mississippi Development Authority (MDA) certification date are included in the rebate amount. 14. Verify that only eligible expenses purchased by the MPPC certified for the incentive are allowed for the rebate. 15. Supply to the DOR an electronic copy of the submission showing the rebate calculation and the line items that were approved/denied. The audit must be submitted to Incentives@dor.ms.gov.

35 Miss. Admin. Code Pt. 10, R. 603 Rule 603

The MPPC shall provide the CPA performing the audit with, at a minimum, the following information: 1. A copy of the Motion Picture Incentive Certificate from MDA. 2. A list of all expenditures claimed by line item in electronic format. 3. Payroll expense reports which identify, trace, and reconcile payroll costs for each employee to a final payroll register, identify on which payments and in what amounts withholdings of Mississippi income tax have been made and document that appropriate corresponding payments and filings have been made to the State of Mississippi. 4. Copies of all paid invoices and receipts relating to each expenditure claimed as base investment. 5. A completed crew list. 6. A completed cast list. 7. MS Driver’s license, voter registration, car tag or homestead exemption to confirm the residency of employees/contract labor. 8. Copies of issued W-2s and 1099s relating to all activities within the State of Mississippi on the state certified production. If the production company has not issued any W-2s or 1099s prior to completion of the submission, then it shall provide other comparable documentation to verify payment. 9. Documentation or other verification that purchases of services and tangible personal property are made from a Mississippi vendor and purchases of services satisfy the five criteria to be eligible for the rebate. Please see paragraph 302 of this regulation. 10. Documentation showing that the MPPC has registered to do business with the Mississippi Secretary of State. 11. Any other documentation needed to confirm base investment, payroll, and fringes expenditures during the audit.

35 Miss. Admin. Code Pt. 10, R. 604 Rule 604

The CPA shall specifically identify the amount of the base investment, payroll, and fringes expenditures eligible for the rebate.

35 Miss. Admin. Code Pt. 10, R. 605 Rule 605

The CPA performing the audit may not include an expenditure in the rebate amount unless the MPPC has provided a receipt of payment or other evidence that the expenditure has been paid by the MPPC and was expended in Mississippi. Please see the most current Mississippi Tax Incentives, Exemptions and Credit Book at https://www.dor.ms.gov/Pages/Business-Incentive.aspx.

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35 Miss. Admin. Code Pt. 10, R. 606 Rule 606

The CPA must verify that any property or services purchased through a Mississippi vendor that has acquired the property or services from out of state meets the requirements in paragraph 308 of this regulation.

35 Miss. Admin. Code Pt. 10, R. 607 Rule 607

The CPA must include the language in the “Requirements for CPAs Auditing Motion Picture Production Rebate Submissions” instructions when submitting the audit. The language must be on the CPAs letterhead.

35 Miss. Admin. Code Pt. 10, R. 608 Rule 608

The DOR will review the audit using a sample in lieu of a one hundred percent (100%) line item review. Upon receipt of the CPA’s audit the DOR will request samples of supporting documentation to be submitted in electronic format if it is not provided. The sample will not exceed ten percent (10%) of the line items.

35 Miss. Admin. Code Pt. 10, R. 609 Rule 609

The CPA must provide the supporting documentation to the DOR within ten (10) days of the request, or the submission will be denied.

35 Miss. Admin. Code Pt. 10, R. 610 Rule 610

The DOR will apply the rate of misstatement of the exceptions identified in the sample, if any, to the respective populations tested. The rate of misstatement will be calculated by the total value of the exceptions identified, divided by the total dollar value tested, and multiplied by the respective populations tested. The total of all calculated misstatements for each population tested will be deducted from the original submission to arrive at a revised rebate amount.

35 Miss. Admin. Code Pt. 10, R. 611 Rule 611

Any adjusted amounts per the sample will be presented to the CPA. Additional information may be provided to the DOR for the transaction in the sample. Keep in mind that the DOR will have thirty (30) days after receipt of the original audit submission by the CPA to approve or deny a request. A rebate check will be issued to the MPPC and is not transferrable.

35 Miss. Admin. Code Pt. 10, R. 612 Rule 612

The State of Mississippi shall not be liable for or otherwise responsible for any actions of a qualified accountant.

35 Miss. Admin. Code Pt. 10, R. 613 (Reserved)

35.X.09 revised effective June 24, 2021.

Chapter 10 SMART Business Incentive

35 Miss. Admin. Code Pt. 10, R. 100 General

35 Miss. Admin. Code Pt. 10, R. 101 Rule 101

The SMART (Strengthening Mississippi Academic Research Through) Business rebate is based on an investor incurring qualified research costs subject to a research agreement as defined in Miss. Code Ann. Section 37-148-1 et seq. The amount of the rebate is twenty- five percent (25%) of the qualified research costs.

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35 Miss. Admin. Code Pt. 10, R. 102 Rule 102

The total amount of rebates authorized for an investor will not exceed $1,000,000 in the aggregate and the total amount of rebates authorized in any fiscal year will not exceed $5,000,000 in the aggregate.

35 Miss. Admin. Code Pt. 10, R. 103 Rule 103

In order to receive the rebate, the investor must submit the SMART Business Incentive form as well as proof of payment to college or research corporation, a copy of the SMART Business certificate from IHL, a copy of the research agreement, and any other documentation requested by the Department of Revenue.

35 Miss. Admin. Code Pt. 10, R. 104 Rebates may not be issued more than once a year to any one investor

35 Miss. Admin. Code Pt. 10, R. 105 Rule 105

Any research performed prior to certification by IHL will not be considered qualified research costs.

35 Miss. Admin. Code Pt. 10, R. 106 Rule 106

Any research performed outside the state of Mississippi will not be considered qualified research.

35 Miss. Admin. Code Pt. 10, R. 107 Rule 107

Any research funded by any grant, contract or otherwise by another person or governmental entity will not be considered qualified research.

35 Miss. Admin. Code Pt. 10, R. 108 (Reserved)

Chapter 11 Sales and Use Tax Exemption for Bond Financing

35 Miss. Admin. Code Pt. 10, R. 100 General

35 Miss. Admin. Code Pt. 10, R. 101 Rule 101

A sales and/or use tax exemption for construction or expansion is available for an eligible business that has obtained bond financing through the Mississippi Business Finance Corporation (MBFC). The type of eligible businesses depends upon the type of bond issued.

35 Miss. Admin. Code Pt. 10, R. 102 Rule 102

The Mississippi Development Authority (MDA) and the MBFC determines whether a business qualifies for financing under these programs and the MDOR determines how the exemption is applied.

35 Miss. Admin. Code Pt. 10, R. 103 Rule 103

The bonds that qualify for the exemptions are authorized by: 1. Sections 57-10-1 et seq., Miss. Code Ann., and is known by the short title of "Small Business Assistance ". 2. Sections 57-61-1 et seq., Miss. Code Ann., and is known by the short title of the “Mississippi Business Investment Act”. 3. Sections 57-71-1 et seq., Miss. Code Ann., and is known by the short title of the "Mississippi Small Enterprise Development Finance Act".

35 Miss. Admin. Code Pt. 10, R. 104 Rule 104

All bonds must be issued within eighteen (18) months from the inducement date or an extension must be requested by the business addressed to the MDOR. If bonds do not remain outstanding for at least one (1) year the purchase is not considered to be made

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with bond proceeds and would not be exempt from sales or use tax. A full accounting of the draws and expenditures associated with bond proceeds is required.

35 Miss. Admin. Code Pt. 10, R. 105 (Reserved)

35 Miss. Admin. Code Pt. 10, R. 200 Small Business Assistance

35 Miss. Admin. Code Pt. 10, R. 201 Rule 201

The Small Business Assistance program is administered by the Mississippi Business Finance Corporation. The sales and use tax exemption is for all purchases, including leases, necessary to establish the enterprise that are made with bond funds. This program consists of two types of bonds, Industrial Revenue Development Bonds and Rural Economic Development Bonds.

35 Miss. Admin. Code Pt. 10, R. 202 Rule 202

The Industrial Revenue Development Bonds are issued to for-profit companies and in very limited circumstances, non-profit companies will qualify. Only businesses engaged in manufacturing or processing may qualify for the tax-exempt bonds. The following businesses may qualify for taxable bonds: 1. Companies that manufacture, process, store, warehouse, assemble or distribute agricultural, mining or industrial products. 2. Research and development enterprises. 3. Offices used to manage, supervise or service a manufacturing operation 4. Any commercial enterprise.

35 Miss. Admin. Code Pt. 10, R. 203 Rule 203

The Rural Economic Development Bonds are issued to manufacturing or processing companies, certain warehouse and distribution centers, certain telecommunication and data processing companies, multi-state national or regional headquarters, certain research and development and technology intensive enterprises.

35 Miss. Admin. Code Pt. 10, R. 204 (Reserved)

35 Miss. Admin. Code Pt. 10, R. 300 Mississippi Business Investment Program

35 Miss. Admin. Code Pt. 10, R. 301 Rule 301

The Mississippi Business Investment Program, administered by the MDA, is designed for making low interest loans to counties and incorporated cities or towns (Local Sponsors) to finance improvements necessary to complement investments by private companies that create and maintain new full-time jobs. The bonds issued are general obligations bonds of the State of Mississippi. The sales and use tax exemption is for all purchases of tangible personal property and services to establish the facility that are made with bond funds.

35 Miss. Admin. Code Pt. 10, R. 302 Rule 302

Eligibility for the assistance provided by the Mississippi Business Investment Program is determined by the MDA and is limited to the following types of projects: Agricultural, industrial, manufacturing, aquacultural or maricultural, tourism, service, regional shopping malls and research and development projects.

35 Miss. Admin. Code Pt. 10, R. 303 Rule 303

Temporary borrowings in anticipation of the issuance of the bonds authorized by this program will mirror the exemption of the bonds. A promissory note from the Local

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Sponsor to the State evidences these borrowings. If the project agreement is unfulfilled, the State can require the Local Sponsor and/or the private company to repay the unpaid loan principal with interest and penalties. If necessary, a portion of the Local Sponsor's sales tax and/or homestead exemption reimbursement may be withheld in an amount that is sufficient to repay the obligation.

35 Miss. Admin. Code Pt. 10, R. 304 (Reserved)

35 Miss. Admin. Code Pt. 10, R. 400 Mississippi Small Enterprise Development Finance Program

35 Miss. Admin. Code Pt. 10, R. 401 Rule 401

The Mississippi Small Enterprise Development Finance Program, administered by the MBFC, is designed for making loans to qualified private companies that will increase employment and investment in the state. The sales and use tax exemption is for all purchases of tangible personal property and services to establish the facility that are made with bond funds.

35 Miss. Admin. Code Pt. 10, R. 402 Rule 402

The loan may not be in excess of ninety percent (90%) of the market value of the financed assets and the loan may not be used to refinance existing debt. The aggregate amount loaned to one borrower may not exceed four million dollars ($4,000,000) and the term shall not exceed twenty (20) years. The project must create a minimum of ten (10) new jobs.

35 Miss. Admin. Code Pt. 10, R. 403 (Reserved)

35 Miss. Admin. Code Pt. 10, R. 500 Purchases

35 Miss. Admin. Code Pt. 10, R. 501 Rule 501

The purchases must be sold directly to, billed directly to and paid for directly by the entity induced by MBFC. The exemption does not cover tagged vehicles or ongoing expenses and supply items that are not purchases required to establish the facility.

35 Miss. Admin. Code Pt. 10, R. 502 Rule 502

Bond financing exemptions do not apply to the three and one-half percent (3½%) or the one and one-half (1½%) contractor’s tax levied in Miss. Code Ann. Section 27-65-21. The contractor’s tax is levied directly on the contractor for the privilege of performing contracts exceeding $10,000 for the construction, repair or renovation of non-residential real property. The contractor’s tax is levied on the contractor’s gross receipts from the construction contract regardless of any exemptions the project owner may have. Purchases of component materials for a construction project made by the contractor and reimbursed by the project owner are considered part of the contractor’s gross receipts subject to the three and one-half percent (3½%) contractor’s tax. Miss. Code Ann. Section 27-65-21(1)(a)ii provides that amounts included in commercial construction contracts with manufacturers representing the sale of manufacturing machinery shall be taxed at the 1 ½% reduced rate of tax in lieu of the 3 ½% contractors’ sales tax. However, the owner’s exemption will apply on the sale by the construction contractor to the project owner of manufacturing machinery that retains its identity as tangible personal property.

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35 Miss. Admin. Code Pt. 10, R. 503 (Reserved)

35 Miss. Admin. Code Pt. 10, R. 600 Applying for the Exemption

35 Miss. Admin. Code Pt. 10, R. 601 Rule 601

For detailed instructions concerning the application process or claiming the credits see the Mississippi Tax Incentives, Exemptions and Credits Book.

35 Miss. Admin. Code Pt. 10, R. 602 (Reserved)

35.X.11 revised effective October 1, 2018

Part 11 Cannabis Dispensaries

35 Miss. Admin. Code Pt. 11, R. 100 Rule 100

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Food and Drug Administration under Section 505 of the Food, Drug and Cosmetic Act.

35 Miss. Admin. Code Pt. 11, R. 101 Rule 101

“Cannabis product” means cannabis flower, concentrated cannabis, cannabis extracts, and products that are infused with cannabis or an extract thereof and are intended for use or consumption by humans. The term includes, without limitation, edible cannabis products, beverages, topical products, ointments, oils, tinctures and suppositories that contain tetrahydrocannabinol (THC) and/or cannabidiol (CBD) except those products excluded from control under Miss. Code Sections 41-29-113 and 41-29-136.

35 Miss. Admin. Code Pt. 11, R. 102 Rule 102

“Cardholder” means a registered patient or a registered designated caregiver who has been issued and possesses a valid registry identification card.

35 Miss. Admin. Code Pt. 11, R. 103 Rule 103

“Concentrate” means a substance obtained by separating cannabinoids from cannabis by: 1. A mechanical extraction process; 2. A chemical extraction process using a nonhydrocarbon-based or other solvent, such as water, vegetable glycerin, vegetable oils, animal fats, food-grade ethanol, or steam distillation; or 3. A chemical extraction process using the hydrocarbon-based solvent carbon dioxide, provided that the process does not involve the use of high heat or pressure.

35 Miss. Admin. Code Pt. 11, R. 104 “Department” means the Mississippi Department of Revenue

35 Miss. Admin. Code Pt. 11, R. 105 “Department of Health” means the Mississippi Department of Health

35 Miss. Admin. Code Pt. 11, R. 106 Rule 106

“Dispensary” means an entity licensed and registered with the Department that acquires, possesses, stores, transfers, sells, supplies, or dispenses medical cannabis, medical cannabis products, equipment used for medical cannabis, or related supplies and educational materials to cardholders. An entity or individual cannot have greater than a ten percent (10%) interest in more than five (5) dispensaries.

35 Miss. Admin. Code Pt. 11, R. 107 Rule 107

“Disqualifying felony offense” means: 1. A conviction for a crime of violence, as defined in Miss. Code Section 97-3-2; 2. A conviction for a crime that was defined as a violent crime in the law of the jurisdiction in which the offense was committed, and that was classified as a felony in the jurisdiction where the person was convicted; or 3. A conviction for a violation of a state or federal controlled substances law that was classified as a felony in the jurisdiction where the person was convicted, including the service of any term of probation, incarceration, or supervised release within the previous five (5) years and the offender has not committed another similar offense since the conviction. Under this subparagraph (3), a disqualifying felony offense shall not include a conviction that consisted of conduct for which the Medical Cannabis Program would likely have prevented the conviction but for the fact that the conduct occurred before the effective date of the Program’s creation. 108 “Economic Interest” means holding an ownership interest as a sole proprietor, partner, limited partner, member holding at least a ten percent (10%) equity or similar interest, stockholder owning at least ten percent (10%) of available stock, or any other type of interest that entitles the individual or entity to regular payments for amounts based on a

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percentage of revenue derived from the sale of cannabis or cannabis products in any licensed dispensary. This definition excludes the following: 1. Any investment that the investor does not control in nature, amount or timing, including mutual funds, group investments, etc.; 2. Lenders that have provided a loan to the dispensary where the repayment amounts for the loan are regular flat fee payments; 3. Operators under management agreements where the fee paid to the management company is a flat monthly rate or is a percentage fee equal to less than ten percent (10%) of the monthly gross revenue of the dispensary; and 4. Landlords that are receiving flat monthly rate lease payments from the dispensary.

35 Miss. Admin. Code Pt. 11, R. 109 Rule 109

“Edible cannabis products” means products that: 1. Contain or are infused with cannabis or an extract thereof; 2. Are intended for human consumption by oral ingestion; and 3. Are presented in the form of foodstuffs, beverages, extracts, oils, tinctures, lozenges, and other similar products.

35 Miss. Admin. Code Pt. 11, R. 110 Rule 110

“Electronic tracking system” means the seed-to-sale system administered by the Department of Health. 111 “Entity” means a corporation, general partnership, limited partnership, or limited liability company that has been registered with the Secretary of State as applicable. 112 “Licensee” means the entity or individual who has received a license from the Department to operate a dispensary. 113 “Main point of entry” and “main entrance” both mean the primary entryway or door through which the majority of cardholders are directed to enter the dispensary to purchase medical cannabis products.

35 Miss. Admin. Code Pt. 11, R. 114 Rule 114

“MMCEU” means Mississippi Medical Cannabis Equivalency Unit. One (1) MMCEU shall be considered equal to: 1. Three and one-half (3.5) grams of medical cannabis flower; 2. One (1) gram of total THC in a medical cannabis concentrate; or 3. One (1) gram of total THC in an infused product.

35 Miss. Admin. Code Pt. 11, R. 115 Rule 115

“Registry identification card” means a document issued by the Department of Health that identifies a person as a registered qualifying patient, nonresident registered qualifying patient, or registered designated caregiver.

35 Miss. Admin. Code Pt. 11, R. 116 Rule 116

“School” means an institution for the teaching of children, consisting of a physical location, whether owned or leased, including instructional staff members and students, and which is in session each school year. This definition shall include, but not be limited to, public, private, church and parochial programs for kindergarten, elementary, junior high, and high schools. Such term shall not mean a home instruction program.

35 Miss. Admin. Code Pt. 11, R. 117 Rule 117

“Brand” shall mean a name, term, design, symbol, or any other feature that identifies one

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seller’s goods or services as distinct from those of other sellers. For the purposes of these regulations, a company logo is considered a brand.

35 Miss. Admin. Code Pt. 11, R. 118 Rule 118

“Topical cannabis product” means a THC-infused product intended for external application to human body surfaces and/or absorption through the skin, does not cross the blood-brain barrier, and is not intended for consumption by oral ingestion. 119 (Reserved)

35.XI.01 revised effective December 1, 2025

Chapter 02 Application Process

35 Miss. Admin. Code Pt. 11, R. 100 Rule 100

An entity or individual may not sell, possess, store, transfer, or distribute medical cannabis or medical cannabis products without first applying for and receiving the appropriate medical cannabis license from the Department.

35 Miss. Admin. Code Pt. 11, R. 101 Rule 101

An application must include the following: 1. The names and other required information for all individuals and legal entities who are applicants. 2. Any forms required by the Department and any information identified in the forms that is required to be submitted. 3. A map or sketch of the premises proposed for licensure, including the defined boundaries of the premises and a scaled floorplan sketch of all enclosed areas with clear identification of the main entrance, walls, all areas of ingress and egress, and all limited access areas. This map must provide accurate measurements that allow the Department, at a minimum, to determine the precise main entrance location in reference to the rest of the premises. 4. If the application is based on proposed construction not completed at the time of application, the applicant must submit construction plans for the proposed building which will be the basis for the application investigation. These plans must, at a minimum, provide accurate measurements that allow the Department to determine the precise main entrance location in reference to the rest of the building. 5. If construction (as referenced in Paragraph 4 above) is still underway at the time of application, information and statements provided in the application shall become conditions of the license if the application is granted, and failure to satisfy the conditions may be cause for revocation or denial of renewal. Licensees cannot deviate from submitted construction plans if the deviation would have disqualified the licensee at the time of application. 6. An operating plan that demonstrates at a minimum how the applicant's proposed premises and business will comply with applicable laws and rules regarding: a. Security; b. Employee qualifications, including background checks, and training; c. Record-keeping systems; d. Hours of operation; e. Preventing non-cardholders under the age of twenty-one (21) from entering the

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licensed premises; and f. Preventing non-cardholders from obtaining or attempting to obtain any items, other than topical products, sold by the dispensary. 7. If the municipality or county where the proposed dispensary will be located has enacted zoning restrictions, a sworn attestation by the applicant that certifies the proposed dispensary is in compliance with the restrictions. 8. Applicants shall provide proof of authorization to occupy the property for the proposed dispensary. To establish proof, the applicant shall provide one of the following: a. If the building is owned by the applicant, the applicant shall provide a copy of the deed showing the applicant as the owner. b. If the building is leased by the applicant, the applicant shall provide a copy of the lease. At a minimum, the lease term must be through the term of the license. c. If the building is not owned or leased by the applicant but will be if a license is issued, the applicant shall provide a contingent agreement with the owner or landlord certifying consent that the applicant has the option to lease or purchase the property contingent upon the issuance of a dispensary license. 9. Applicants must have a valid Sales Tax Permit for the proposed location. 10. Applicants must not owe delinquent taxes. 11. A survey completed in the last year by a professional land surveyor holding a current license in the State of Mississippi that is sufficient to show that there is no property boundary line of any church, school, or childcare center within a one thousand (1,000) foot radius of the main entryway of the proposed location. If the survey shows that the nearest property boundary line is within one thousand (1,000) feet but over five hundred (500) feet away, the applicant must include approval of a waiver from the church, school, or childcare center.

35 Miss. Admin. Code Pt. 11, R. 102 Rule 102

In addition to submitting the application and the items described in Paragraph 101 of this rule, the Department will require the following to be submitted: 1. For applicants: a. An affidavit provided by the Department affirming that, among other things, the applicant has not been convicted of a disqualifying felony; and b. Any forms required by the Department and any information identified in the form that is required to be submitted. 2. The names and other required information for all individuals and legal entities with an economic interest in the business. 3. For an individual or legal entity with an economic interest: a. An affidavit provided by the Department affirming that, among other things, the applicant has not been convicted of a disqualifying felony; and b. Any forms required by the Department and any information identified in the form that is required to be submitted. 4. Any additional information that the Department requires to supplement provided information and determine eligibility.

35 Miss. Admin. Code Pt. 11, R. 103 Rule 103

The Department will review an application to determine if it is complete. An application will not be considered complete if the applicant does not provide all information required by the application form, the full application and license fees have not been paid, or all of

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the additional information required under these rules is not submitted. If items are missing, the Department will send a notification to the applicant that the application has been rejected and provide a description of the needed information. The applicant will need to resubmit an amended application for a license if the application is rejected.

35 Miss. Admin. Code Pt. 11, R. 104 Rule 104

Once all required information is received and the fees have been paid, the Department will send a notification to the applicant that it has received a completed application. Once the application has been deemed complete, the Department will investigate the application and issue a determination within thirty (30) days of receiving the completed application. Applications will be processed in the order in which a completed application is filed. Investigations will be initiated based on the order in which a complete application is filed; however, the duration of the investigation will depend upon the information provided by the applicant.

35 Miss. Admin. Code Pt. 11, R. 105 Rule 105

The applicant will be required to pay the fifteen thousand dollars ($15,000) application fee and twenty-five thousand dollars ($25,000) license fee before the application can be considered complete. If the applicant is denied a license because its main entrance is within one thousand five hundred (1,500) feet of a licensed dispensary, both the fifteen thousand dollars ($15,000) application fee and the twenty-five thousand dollars ($25,000) license fee will be refunded. If the license is denied for any other reason, including violation of any other distance restriction, the twenty-five thousand dollars ($25,000) license fee will be refunded, but the fifteen thousand dollars ($15,000) application fee will not be refunded. The application fee and license fee must be paid by credit card or ACH debit through the licensing vendor selected for the Mississippi Medical Cannabis Program. 106 The Department will make a determination as to whether to grant or deny a license within thirty (30) days of receiving a completed application. If the Department is unable to receive the results of a background check for disqualifying felonies within those thirty (30) days, it will grant a license to otherwise successful applicants. Thereafter, if the Department receives results from the background checks that include a disqualifying felony, it will provide the licensee with the opportunity to divest itself of the individual with a disqualifying felony. If the licensee is unable to or refuses to do so within ten (10) days of notice, the Department will revoke the subject license.

35 Miss. Admin. Code Pt. 11, R. 107 Rule 107

After a license is issued to a licensee, the licensee will schedule a final inspection with the Department. The purpose of this final inspection is to determine whether the licensed premises has met certain requirements that must be completed prior to its opening and selling cannabis products. The Department must conduct a final inspection of the licensed premises and confirm that the licensee has implemented its approved security plan and that the location of the main entrance to the dispensary matches the location listed in its application. If the municipality or county where the licensed dispensary is located requires a local registration, license, or permit, then the licensee must provide the information at the final inspection. This final inspection must be completed prior to the licensee being authorized to sell medical cannabis to patients. 108 If a license is issued to an applicant who is still constructing the licensed premises, the applicant must complete construction and pass its final inspection within eighteen (18)

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months of the initial issuance of its license. If not, the license will be revoked. Additionally, regardless if the licensee has passed the final inspection, all licenses must be renewed annually.

35 Miss. Admin. Code Pt. 11, R. 109 (Reserved)

35.XI.02 revised effective December 1, 2025

Chapter 03 Distance Requirements

35 Miss. Admin. Code Pt. 11, R. 100 Rule 100

The main point of entry to a dispensary cannot be located within one thousand (1,000) feet of the nearest property boundary line of any school, church, or childcare facility unless the dispensary applicant obtains a waiver from the school, church, or childcare facility. Regardless of the waiver, a dispensary may not be located within five hundred (500) feet of any school, church, or childcare facility property boundary line. The property boundary line to be considered is the parcel of land on which a school, church, or childcare facility is located. It does not include parcels of land owned by a school, church, or childcare facility but on which such a facility is not located.

35 Miss. Admin. Code Pt. 11, R. 101 Rule 101

The following applies under this Chapter for purposes of property boundary line measurements: 1. The applicable property boundary line for a church facility shall be the parcel of land on which a structure exists or is in the process of being constructed at the time of application where worship services are held on a regularly occurring basis to include religious ceremonies, religious counseling and/or religious studies. The applicable property boundary line does not include parking lots, fields on which no church facilities are located or other parcels owned by churches unless the parcel also includes a church facility. 2. The applicable property boundary line for a childcare facility shall be the parcel of land on which a structure exists or is in the process of being constructed at the time of application and for which the Department of Health has issued a childcare facility license or would have issued a childcare facility license but for an applicable exemption under Miss. Code Ann. Section 43-20-5. The applicable property boundary line does not include parking lots, fields on which no childcare facilities are located or other parcels owned by a child care center unless the parcel also includes a child care facility. 3. The applicable property boundary line for a school shall be the parcel of land on which a facility exists or is in the process of being constructed at the time of application used for the teaching of children, whether owned or leased by the school, including instructional staff members and students and which is in session each school year. This includes but is not limited to, public, private, church, and parochial programs for kindergarten, elementary, junior high, and high schools. The applicable property boundary line does not include parking lots, fields on which no school facility is located or other parcels owned by a school unless the parcel also includes a school facility.

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35 Miss. Admin. Code Pt. 11, R. 102 Rule 102

The main point of entry for a dispensary cannot be located within one thousand five hundred (1,500) feet of the main point of entry for an existing dispensary. When two completed applications are received and the main points of entry for each are within one thousand five hundred (1,500) feet of the other, the first applicant to be issued a license will be controlling. The second applicant will not be eligible to receive a license for its applied location with the listed main point of entry.

35 Miss. Admin. Code Pt. 11, R. 103 Rule 103

All measurements shall be made using a straight line, point-to-point method. When a main point of entry constitutes an end point, measurement shall begin at the mid-point of the door if a single door; and the point where the doors meet for dual door entrances.

35 Miss. Admin. Code Pt. 11, R. 104 Rule 104

If the premises construction is complete at the time of application, the Department will investigate the application based on the completed construction when reviewing distance requirements. If the building construction is complete but there are planned changes to the main point of entry prior to opening, the Department will investigate the application based on the premises map or sketch included with the application. If the application is based on proposed building construction not completed at the time of application, the Department will investigate the application based on the survey and construction plans submitted with the application. The determination as to whether a license should be issued will be based on these respective documents. Therefore, any change to these documents or actual placement of a main point of entry which would have materially affected the decision of the Department to issue a license could subject the license to future revocation.

35 Miss. Admin. Code Pt. 11, R. 105 (Reserved) 35.XI.03 revised effective December 1, 2025

Chapter 04 Annual Renewal 100 Active licenses must be renewed on an annual basis. Licenses are valid for one year from the date of issuance. At the time of renewal, the licensee must demonstrate continued compliance with all applicable licensing criteria.

35 Miss. Admin. Code Pt. 11, R. 101 Rule 101

An annual inspection by the Department may be required for the renewal of the license.

35 Miss. Admin. Code Pt. 11, R. 102 Rule 102

A license shall not be renewed by the Department if: 1. Outstanding fines are owed to the Department; 2. An owner or individual with an economic interest has been convicted of a disqualifying felony; 3. Renewal will result in any person having a direct or indirect ownership or economic interest of greater than ten percent (10%) in more than five (5) dispensary licenses; 4. The licensed entity owes delinquent taxes; or 5. The licensed entity no longer meets all eligibility requirements for the issuance of a dispensary permit. 103 At the time of renewal, the licensee shall ensure that all material changes to the required

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plans have been communicated in writing to the Department. 104 The licensee shall submit proof, through a renewed local authorization certification form, that the licensee is still in compliance with all requisite local permits and licenses and is in good standing with the municipality or other local entity wherein the licensee's facility is located. 105 An applicant may appeal a renewal denial as provided by law.

35 Miss. Admin. Code Pt. 11, R. 106 Rule 106

The renewal fee must be paid by credit card or ACH debit through the licensing vendor selected for the Mississippi Medical Cannabis Program. 107 (Reserved)

35.XI.04 revised effective December 1, 2025

Chapter 05 Department Approval Required for Transfer

35 Miss. Admin. Code Pt. 11, R. 100 Rule 100

A licensee may transfer ownership interests, including without limitation partial ownership, only after the application for a transfer of an ownership interest has been approved by the Department.

35 Miss. Admin. Code Pt. 11, R. 101 Rule 101

An application for the transfer of ownership interests must: 1. Be completed on forms made available by the Department; 2. Be submitted to the Department; and 3. Be accompanied by all required forms and supplemental information, provided by the person or entity seeking to assume an ownership interest, similar to that required in an application for a dispensary license to demonstrate compliance with all applicable requirements for licensure. 102 Criminal history record checks are required for anyone proposed as an owner, officer, director, board member, or anyone with an economic interest. 103 The Department may revoke or suspend a license upon discovery of any effort to transfer an ownership interest in a license without complying with the requirements of this subsection.

35 Miss. Admin. Code Pt. 11, R. 104 (Reserved)

35.XI.05 revised effective December 1, 2025

Chapter 06 Temporary Appointee

35 Miss. Admin. Code Pt. 11, R. 100 Rule 100

Ownership or operations generally may not be transferred to a person or business entity prior to the approval of an application for transfer of ownership interests. However, in case

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of death or physical or mental disability of any licensee, the estate, trustee, or guardianship of the licensee shall be allowed to operate the permitted business for a period not exceeding sixty (60) days after the death or disability. During the sixty (60) day period, any member of the licensee’s immediate family may make an application to the Department for the unexpired portion of the license of the decedent to be assigned to him.

35 Miss. Admin. Code Pt. 11, R. 101 Rule 101

If such application is approved, the applicant shall be granted the right, without payment of an additional permit fee, to operate the licensed place of business for the unexpired portion of the time of the original license.

35 Miss. Admin. Code Pt. 11, R. 102 (Reserved)

35.XI.06 revised effective December 1, 2025

Chapter 07 Approval for Transfer of Licensed Premises Location

35 Miss. Admin. Code Pt. 11, R. 100 Rule 100

A licensee must submit an update to its license to the Department for approval prior to any relocation of a dispensary even if the move is entirely within a premises in control of the licensee. This includes but is not limited to, expansions, changes in physical address, or changes to the co-location of multiple establishment types. A licensee may request to transfer its location within the city it is currently located within or to a different city or county location. 101 The dispensary must update its account within the medical cannabis license portal with the following information: 1. Documentation from the local government confirming that the proposed relocation would comply with all local zoning restrictions. 2. Updated facility plan, security plan, operating plan, and proof of compliance with permitting requirements. 3. Updated survey showing that all distance requirements are met and/or a distance waiver has been attained, as applicable. 4. A new sales tax permit for the location has been obtained if the move is to a new address. 102 A request for relocation to the Department would be subject to all distance restrictions applicable to dispensary applicants.

35 Miss. Admin. Code Pt. 11, R. 103 A transfer shall not occur prior to approval by the Department

35 Miss. Admin. Code Pt. 11, R. 104 (Reserved)

35.XI.07 revised effective December 1, 2025

Chapter 08 Security Plans

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35 Miss. Admin. Code Pt. 11, R. 100 Rule 100

An applicant must have a security plan that is included in its operation plan that is approved by the Department as part of the initial application process. This security plan will list the measures that will be taken by the dispensary to ensure that medical cannabis products are properly secured and safe. It shall include information relating to surveillance systems, camera placement, door security, alarm systems, and measures taken to secure manners of egress and ingress onto the premises. At a minimum, the security plan must meet all requirements set forth in these regulations.

35 Miss. Admin. Code Pt. 11, R. 101 Rule 101

A licensee must notify the Department in writing of any proposed changes to a security plan and must have approval prior to implementing any change. The Department will notify a licensee in writing whether the change is approved.

35 Miss. Admin. Code Pt. 11, R. 102 Rule 102

The Department may withdraw approval of the security plan at any time if there have been one or more documented instances of theft or loss of cannabis products on the licensed premises within the past year. If the Department withdraws its approval of the security plan, the licensee will be given thirty (30) days to modify the plan in a manner that satisfactorily safeguards against future theft or loss of cannabis products. Failure to modify in a satisfactory manner within the prescribed time may result in suspension or revocation.

35 Miss. Admin. Code Pt. 11, R. 103 Rule 103

Failure to comply with the terms of an approved security plan will result in disciplinary action by the Department. 104 (Reserved)

35.XI.08 revised effective December 1, 2025

Chapter 09 Securing Cannabis and Cannabis Products 100 A licensee is responsible for the security of all cannabis products on the licensed premises, providing adequate safeguards against theft or diversion of cannabis products, and records that are required to be kept.

35 Miss. Admin. Code Pt. 11, R. 101 Rule 101

The licensee must ensure that commercial grade, non-residential door locks are installed on every external door, and gate if applicable, of a licensed premises where cannabis products are present.

35 Miss. Admin. Code Pt. 11, R. 102 Rule 102

During all hours when the licensee is not operating, a licensee must ensure that: 1. All points of ingress and egress from a licensed premises are securely locked and any keys or key codes to the enclosed area remain in the possession of the licensee, licensee representative, or authorized personnel; and 2. All cannabis products on a dispensary’s premises are kept in a locked, secured location or enclosure within any area such that cannabis products are not visible from any area outside the licensed premises. 103 (Reserved)

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35.XI.09 revised effective December 1, 2025

Chapter 10 Alarm System

35 Miss. Admin. Code Pt. 11, R. 100 Rule 100

A dispensary must have a fully operational security alarm system, activated at all times when the dispensary is closed for business.

35 Miss. Admin. Code Pt. 11, R. 101 Rule 101

The security alarm system for the licensed premises must: 1. Be able to detect unauthorized entry onto the licensed premises and unauthorized activity within any limited access area where cannabis and/or cannabis products are present; and 2. Be programmed to notify the licensee, licensee representative, or authorized personnel and, unless properly deactivated by the user, local law enforcement in the event of an unauthorized entry. 102 A dispensary that has at least one authorized representative physically present on the licensed premises at all times when it is closed for business is not required to comply with Paragraphs 100 and 101 of this Chapter.

35 Miss. Admin. Code Pt. 11, R. 103 Rule 103

Upon request, a dispensary shall make all information related to security alarm systems, monitoring, and alarm activity available to the Department 104 (Reserved)

35.XI.10 revised effective March 4, 2025

Chapter 11 Video Surveillance

35 Miss. Admin. Code Pt. 11, R. 100 Rule 100

A licensed premises must have a fully operational video surveillance recording system.

35 Miss. Admin. Code Pt. 11, R. 101 Rule 101

Video surveillance equipment must, at a minimum: 1. Consist of: a. Digital video recorders; b. Video monitors; c. Digital archiving devices; d. A minimum of one (1) monitor on-premises capable of viewing video; and e. Interface devices, if required to adequately operate system or machinery such as a mouse and keyboard. 2. Have the capability of producing and printing a still photograph from any camera image; 3. Be equipped with a failure notification system that provides, within one (1) hour, notification to an authorized representative of surveillance interruption or failure for more than thirty (30) minutes; and 4. Have sufficient battery backup to support a minimum of one hour of recording time in the event of a power outage. 102 A dispensary must have cameras that continuously record, twenty-four (24) hours a day: 1. In all areas where cannabis products may be present, including but not limited to

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point of sales areas, on the licensed premises; 2. All points of ingress and egress to and from areas where cannabis products may be present as well as any entrance or exit door from the premises; 3. All areas in which the dispensary provides parking for cardholders; 4. All areas in which the dispensary receives medical cannabis products from a third party or loads up medical cannabis products for transportation to a third party. 103 A licensee must: 1. In all areas where camera coverage is required, use cameras that record at a minimum resolution of HD 1080p and record at least twenty (20) fps (frames per second); 2. Use cameras that are capable of recording in both high and low lighting conditions; 3. Have and keep surveillance recordings for a minimum of one hundred and twenty (120) calendar days; 4. Maintain surveillance recordings in a format that can be easily accessed for viewing and easily reproduced; 5. Upon request of the Department, keep surveillance recordings for periods exceeding the retention period specified in this rule; 6. Have the date and time embedded on all surveillance recordings without significantly obscuring the picture; 7. Make video surveillance records and recordings available immediately upon request to the Department in a format specified by the Department; 8. Notify the Department within forty-eight (48) hours of any equipment failure or system outage lasting thirty (30) minutes or more; and 9. Back up the video surveillance recordings off-site and in real-time for the surveillance room or surveillance area.

35 Miss. Admin. Code Pt. 11, R. 104 Rule 104

A dispensary: 1. May not stop the recording or continuous real-time backup of the recording for a surveillance area unless all other cameras on the licensed premises are shut down under this section or in instances where maintenance must be performed on an individual camera. During such a time the area formerly under surveillance must be monitored at all times by an employee of the licensee. 2. Must resume all required recording no later than the date and time specified in the notice submitted under Paragraph 105 of this section. 3. May not engage in any licensed privileges in any areas where recording was stopped under this section. 105 A dispensary may stop recording in areas where cannabis and/or cannabis products are not present due to seasonal closures or prolonged periods of inactivity of at least thirty (30) days. At least twenty-four (24) hours before stopping recording, a dispensary must submit written notice to the Department. The notice must include: 1. A copy of the licensee's plot plan or diagram showing which cameras will be deactivated, the total number of cameras that will be deactivated, and a description or list of areas or applicable labels of the deactivated cameras. 2. The date and time recording will stop. 3. An explanation for why the recording will be stopped. 4. The date and time recording will resume.

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35 Miss. Admin. Code Pt. 11, R. 106 Rule 106

A dispensary may not engage in any privileges of the license in an area that does not have camera coverage as required by law or in an area where camera coverage has been stopped, including but not limited to possessing, storing, transferring, or receiving cannabis products.

35 Miss. Admin. Code Pt. 11, R. 107 (Reserved)

35.XI.11 revised effective March 4, 2025

Chapter 12 Advertising and Marketing

35 Miss. Admin. Code Pt. 11, R. 100 Rule 100

Dispensaries shall comply with all restrictions on advertising and marketing set forth in Department of Health regulations. 101 (Reserved)

35.XI.12 revised effective December 1, 2025

Chapter 13 Use of Inducements

35 Miss. Admin. Code Pt. 11, R. 100 Rule 100

Dispensaries may utilize inducements to assist qualified patients. Inducements must not persuade or influence the use of medical cannabis outside of practitioner recommendations and/or limitations or the amounts allowed by the Mississippi Medical Cannabis Act. Examples of authorized inducements include: 1. The use of discount cards; 2. The use of coupons; 3. The use of “punch cards” to offer discounts/free products; 4. Promotion of sales/discounts on medical cannabis, including “buy one, get one” discounts, and daily/weekly/monthly deal discounts; and 5. The giving away of educational materials, including but not limited to, branded merchandise. 101 (Reserved)

35.XI.13 revised effective July 1, 2022

Chapter 14 Building Signage Requirements

35 Miss. Admin. Code Pt. 11, R. 100 Rule 100

Each dispensary is required to place a sign on its exterior in a conspicuous location that may be clearly viewed by the public that identifies the name of the entity that owns the dispensary and lists the license number issued by the Department.

35 Miss. Admin. Code Pt. 11, R. 101 Rule 101

Each dispensary is required to place a copy of its dispensary license in a conspicuous location within the point-of-sale area in a manner that may be clearly viewed by patients.

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35 Miss. Admin. Code Pt. 11, R. 102 Rule 102

These requirements shall be in addition to any general restrictions and obligations set forth in Department of Health regulations.

35 Miss. Admin. Code Pt. 11, R. 103 (Reserved)

35.XI.14 revised effective December 1, 2025

Chapter 15 Controlling Access to Areas of the Premises Designated for Retail Sales

35 Miss. Admin. Code Pt. 11, R. 100 Rule 100

A dispensary shall maintain control of areas of the premises designated for sales to ensure that only authorized individuals are able to enter, using one of the following arrangements: 1. Stationing an employee at the entry door during all hours of public operation. The employee shall check for valid identification and control entry to the premises; or 2. Keeping entry doors locked. The establishment shall use a door buzzer or other means to alert employees that a person wants to enter the premises. An employee shall check for valid identification before allowing entry.

35 Miss. Admin. Code Pt. 11, R. 101 Rule 101

Individuals are prohibited from entering unless they are either over the age of twenty-one (21) or are under the age of twenty-one (21), accompanied by a guardian, and have a valid patient card. 102 Cannabis products may only be displayed in such a way that prevents access to persons who are not employees.

35 Miss. Admin. Code Pt. 11, R. 103 Rule 103

A dispensary can be located in the same building as another business, but the dispensary cannot share a premises. The licensed premises of the dispensary cannot share common entries or exits with other businesses. Additionally, there cannot be an entrance or exit within the interior of the dispensary connecting it with another business.

35 Miss. Admin. Code Pt. 11, R. 104 (Reserved)

35.XI.15 revised effective March 4, 2025

Chapter 16 Items that Dispensaries are Authorized to Sell on the Premises

35 Miss. Admin. Code Pt. 11, R. 100 Rule 100

Dispensaries may only sell certain items on the licensed premises. This includes medical cannabis, equipment used for medical cannabis, or related supplies and educational materials. Except for topical products, these items may only be sold to cardholders.

35 Miss. Admin. Code Pt. 11, R. 101 Rule 101

Medical cannabis includes cannabis, cannabis products, and edibles containing cannabis.

35 Miss. Admin. Code Pt. 11, R. 102 Rule 102

Cannabis products include cannabis flower or trim of no more than thirty percent (30%) total THC, cannabis tinctures, oils, and concentrates of no more than sixty percent (60%) total THC, and edible cannabis products of no more than sixty percent (60%) total THC.

35 Miss. Admin. Code Pt. 11, R. 103 Rule 103

Equipment used for medical cannabis includes pipes, bongs, rolling machines, grinders,

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and similar products.

35 Miss. Admin. Code Pt. 11, R. 104 Rule 104

Related supplies include rolling papers, bags, glass container jars, rolling trays, and similar products.

35 Miss. Admin. Code Pt. 11, R. 105 Rule 105

Dispensaries are prohibited from selling items outside this scope of categories on the licensed premises. This prohibition includes but is not limited to, clothing, food that does not contain cannabis, beverages that do not contain cannabis, propane or butane, and vaping products that do not contain cannabis.

35 Miss. Admin. Code Pt. 11, R. 106 Rule 106

A dispensary may sell approved topical products to a non-cardholder who is twenty-one (21) years of age or older. A dispensary may not sell any other product to a non-cardholder, regardless of age. 107 (Reserved)

35.XI.16 revised effective March 4, 2025

Chapter 17 Point of Sale Areas

35 Miss. Admin. Code Pt. 11, R. 100 Rule 100

With the exception of topical products, a dispensary must keep all permitted cannabis products in limited access areas where access is restricted to licensees and employees. 101 With the exception of topical products, no person who is not a licensee or employee may handle cannabis products in the point-of-sale area unless a licensee or its employee supervises the person at all times.

35 Miss. Admin. Code Pt. 11, R. 102 Rule 102

With the exception of topical products, a patient may handle cannabis products without the supervision of a licensee or employee only following the completion of a sale and once the purchased items are no longer within the premises or within an area that the licensee controls. This language should not be construed to require that a patient be escorted from the premises after purchase.

35 Miss. Admin. Code Pt. 11, R. 103 (Reserved)

35.XI.17 revised effective March 4, 2025

Chapter 18 General Requirements

35 Miss. Admin. Code Pt. 11, R. 100 Rule 100

A dispensary is responsible for the operation of its licensed establishment in compliance with all applicable state laws and rules. 101 A licensee has the responsibility to control its conduct and the conduct of employees, customers, contractors, and visitors on the licensed premises at all times. A licensee shall ensure that at all times during operating hours and hours of apparent activity, there is an

Page 17 of 30

on-site employee authorized to cooperate with the Department during inspections of the premises and requests to review business records or surveillance videos. Except as otherwise provided by law, a licensee or employee may not: 1. Use or be under the influence of alcoholic beverages, cannabis, or controlled substances on the licensed premises; 2. Permit any disorderly or visibly intoxicated person to remain on the licensed premises; 3. Engage in or allow behavior on the licensed premises that provokes conduct which presents a threat to public safety; 4. Engage in or permit any other person to engage in, conduct on the licensed premises that is prohibited by law; or 5. Engage in or permit any other person to engage in the consumption of any type of cannabis product on the premises.

35 Miss. Admin. Code Pt. 11, R. 102 Rule 102

A licensee is prohibited from manufacturing, selling, or offering for sale any cannabis product intended for intravenous delivery or that involves any type of injection involving piercing of the skin of a human.

35 Miss. Admin. Code Pt. 11, R. 103 Rule 103

Except for a dispensary operating under a management agreement under which no economic interest is created for the operator, the licensee in all cases must operate the business for himself and have direct control over its operation.

35 Miss. Admin. Code Pt. 11, R. 104 Rule 104

No management agreement for a licensed place of business shall be effective until the Department has approved the same including review of all economic interests created by such management agreements.

35 Miss. Admin. Code Pt. 11, R. 105 Rule 105

The management agreement must provide that the licensee will be absolutely responsible for any and all violations of the Mississippi Medical Cannabis Act or rules and regulations occurring on the licensed premises.

35 Miss. Admin. Code Pt. 11, R. 106 Rule 106

A licensee shall be accountable for any criminal or regulatory misconduct by its employees which occurs on any part of the licensed premises whether the licensee or a manager is present or not. Such misconduct may result in a fine, suspension, or revocation of the license depending upon the type of misconduct that occurs.

35 Miss. Admin. Code Pt. 11, R. 107 Rule 107

A licensee shall be accountable for any criminal or regulatory misconduct by non- employees when the Department finds that the licensee or licensee’s employees knew or reasonably should have known about the non-employee misconduct and did not take any action to stop the misconduct. Such misconduct may result in a fine, suspension, or revocation of the license depending upon the type of misconduct that occurs.

35 Miss. Admin. Code Pt. 11, R. 108 Rule 108

With the exception of topical products sold to non-cardholders, a licensee must report medical cannabis dispensing information every twenty-four (24) hours to the Prescription Monitoring Program implemented and operated by the Mississippi Board of Pharmacy under Miss. Code Ann. Section 73-21-127. The dispensary information reported will be subject to rules and guidelines promulgated by the Mississippi Board of Pharmacy and will include, but not be limited to, the qualified patient’s registry identification card number and

Page 18 of 30

the amount of medical cannabis dispensed to the patient.

35 Miss. Admin. Code Pt. 11, R. 109 Rule 109

A licensee must complete all training required for the applicable seed-to-sale electronic tracking system to receive appropriate credentials and interact with the electronic tracking system as required by law and these regulations.

35 Miss. Admin. Code Pt. 11, R. 110 Rule 110

A licensee must utilize a permitted Medical Cannabis Waste Disposal Entity, as described in the Department of Health regulations, in order to dispose of any Medical Cannabis products.

35 Miss. Admin. Code Pt. 11, R. 111 (Reserved)

35.XI.18 revised effective December 1, 2025

Chapter 19 Operating Hours

35 Miss. Admin. Code Pt. 11, R. 100 Rule 100

The operating plan of a dispensary must state the business hours for interaction with patients, including sales and consultation, and hours for business-related activities, including accepting delivery of products and employee training.

35 Miss. Admin. Code Pt. 11, R. 101 Rule 101

The operating plan shall state the hours (“normal business hours”) during which it will sell or transfer cannabis products, along with cannabis paraphernalia, on the licensed premises to cardholders. 102 The following activities should be conducted during normal business hours as stated in the operating plan or two hours before or two hours after such normal business hours: 1. Accept deliveries of permitted items and manage its inventory; 2. Enter transfers or deliveries into the tracking system; 3. Conduct employee training; or 4 Perform administrative work, cleaning, or maintenance.

35 Miss. Admin. Code Pt. 11, R. 103 Rule 103

A dispensary must notify the Department in writing if it wishes to conduct activities outside these hours. 104 If a local government alters the business hours applicable to a dispensary, the dispensary shall amend its operating plan and submit the amended operating plan to the Department for approval within thirty (30) days of the local government’s action.

35 Miss. Admin. Code Pt. 11, R. 105 (Reserved)

35.XI.19 revised effective March 4, 2025

Chapter 20 Employees 100 A dispensary may not employ anyone who has been convicted of a disqualifying felony offense or is under the age of twenty-one (21). A dispensary may not employ any individual

Page 19 of 30

who does not have a valid work permit.

35 Miss. Admin. Code Pt. 11, R. 101 Rule 101

An individual will not be able to work at a dispensary until after he or she receives a work permit and completes eight (8) hours of continuing education relating to medical cannabis. Thereafter, it is the individual’s responsibility to annually complete five (5) hours of continuing education relating to medical cannabis to maintain such certification. An individual is required to renew his or her permit every five (5) years.

35 Miss. Admin. Code Pt. 11, R. 102 Rule 102

If an individual does not complete the annual continuing education requirements, the individual’s work permit may be revoked or suspended until such time as the education requirements are completed.

35 Miss. Admin. Code Pt. 11, R. 103 Rule 103

Each dispensary is required to create an identification badge for its employees. This badge will be conspicuously worn by the employee at all times on the licensed premises.

35 Miss. Admin. Code Pt. 11, R. 104 Reserved

35.XI.20 revised effective March 4, 2025

Chapter 21 Sales Limits

35 Miss. Admin. Code Pt. 11, R. 100 Rule 100

A resident cardholder may not receive more than twenty-four (24) MMCEUs from a dispensary or combination of dispensaries during any rolling thirty (30) day period. “Rolling” shall be calculated by reviewing the previous twenty-nine (29) days.

35 Miss. Admin. Code Pt. 11, R. 101 Rule 101

A non-resident cardholder may not receive more than six (6) MMCEUs from a dispensary or a combination of dispensaries during any rolling seven (7) day period. Additionally, a non-resident cardholder may not receive more than twelve (12) MMCEUs from a dispensary or a combination of dispensaries during any rolling fifteen (15) day period. “Rolling” shall be calculated by reviewing the previous six (6) day or fourteen (14) day period, as applicable. 102 A cardholder’s patient card may indicate that the patient is restricted to receiving an MMCEU amount less than the amounts stated in Paragraphs 100 and 101 above. It may also indicate that the patient is restricted to receiving medical cannabis products in certain forms. A dispensary is required to restrict its sales to any such patient to match the limitations set forth on the patient card.

35 Miss. Admin. Code Pt. 11, R. 103 Rule 103

A dispensary is required to report to the Department the identity of any individual who communicates the intent to divert cannabis products to individuals who do not have cards, across state lines, or to engage in the unlicensed sale of cannabis. Such reporting must be done as soon as reasonably possible.

35 Miss. Admin. Code Pt. 11, R. 104 Rule 104

A dispensary shall report any criminal activity of which it is aware related to the unlicensed sale or diversion of cannabis, cannabis products, or cannabis plants. Failure to report such activity to the Department may result in penalties up to and including license suspension,

Page 20 of 30

revocation, and monetary fines. 105 A dispensary shall report all transactions involving cannabis products into the state- approved seed-to-sale electronic tracking system. 106 A dispensary may not sell topical products to any individual for resale or distribution to anyone other than that individual. If a dispensary knows or reasonably should know that an individual is purchasing the topical products for resale or distribution, the dispensary must cease all sales to this individual and report the activities to the Department. 107 (Reserved)

35.XI.21 revised effective March 4, 2025

Chapter 22 Dispensing of Cannabis Products

35 Miss. Admin. Code Pt. 11, R. 100 Rule 100

Before a dispensary may sell cannabis products to a cardholder, including resident cardholders, non-resident cardholders, and designated primary caregiver cardholders, the dispensary employee will: 1. Verify the validity of the patient card by scanning the card; 2. Verify the requested amount of cannabis products would not cause the patient to exceed the applicable MMCEU purchase and possession restrictions for cardholders or any applicable restrictions on the form of medical cannabis product that may be sold to the patient; and 3. Enter the following information into the electronic tracking system: a. The number of the registry identification card of the patient or the name of the designated primary caregiver of the patient; b. The amount, sale price, package identification number, and type of cannabis product dispensed; c. Whether the cannabis product was dispensed to the patient or to the designated primary caregiver of the patient; d. The date and time at which the cannabis product was dispensed; e. The employee’s work permit number; and f. The license number of the dispensary. 101 A dispensary may sell topical products to cardholders and non-cardholders. The products may only be sold to non-cardholders who are over the age of twenty-one (21). Prior to selling topical products to a cardholder, a dispensary must follow the steps listed in Paragraph 100(3) above. Prior to selling to a non-cardholder, a dispensary will enter the following information into the electronic tracking system: 1. The amount, sale price, package identification number, and type of cannabis product being dispensed (topical); 2. The date and time at which the topical product was dispensed; 3. The employee’s work permit number; and 4. The license number of the dispensary.

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35 Miss. Admin. Code Pt. 11, R. 102 (Reserved)

35.XI.22 revised effective March 4, 2025

Chapter 23 Storage and Sale of Cannabis Products

35 Miss. Admin. Code Pt. 11, R. 100 Rule 100

With the exception of topical products, a dispensary must store all cannabis products behind a counter or other barrier to ensure a cardholder does not have direct access to the cannabis products.

35 Miss. Admin. Code Pt. 11, R. 101 Rule 101

Upon the request of a cardholder, a dispensary must disclose the name of the independent testing laboratory which performed the required quality assurance tests for the dispensary. 102 A dispensary may only sell concentrated cannabis, topical products, edible cannabis products, and cannabis-infused products obtained from a facility for the production of such products which holds a license issued by the Department of Health or from another dispensary licensed by the Department. Each dispensary shall maintain a file which contains test results for any such approved product at the dispensary and shall make the file available for review upon request. 103 (Reserved)

35.XI.23 revised effective December 1, 2025

Chapter 24 Prohibited Conduct

35 Miss. Admin. Code Pt. 11, R. 100 Rule 100

In addition to any other prohibitions and restrictions by law, a dispensary must not: 1. With the exception of topical products, conduct any transaction without face-to-face verification of the purchaser's identity and cardholder status by scanning the registry identification card. For topical products, a dispensary must first confirm that the individual is over the age of twenty-one (21); 2. Sell cannabis products that have not passed mandatory testing as required by regulations issued by the Department of Health; 3. Sell cannabis products that have not been purchased from a licensed cultivator, processor, or dispensary; 4. Sell cannabis products that are not properly packaged or labeled in accordance with applicable rules or statutes; 5. Give away cannabis products, immature cannabis plants, or cannabis seedlings; 6. Sell or give away: a. Mature cannabis plants; b. Food that does not contain cannabis intended for medical treatment; or c. Any item that is not considered to be a cannabis product, equipment used for cannabis products, or related supplies and educational materials. 7. With the exception of topical products, sell any item to a non-cardholder. 8. Sell to any cardholder an amount of cannabis that exceeds the applicable maximum

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amount to be sold within a rolling, seven (7), fifteen (15), or thirty (30) day time period; 9. Sell to any cardholder a form of medical cannabis product to a patient whose patient card indicates that he or she is restricted to only receiving a certain form of medical cannabis product; 10. Sell or distribute cannabis products using: a. Curbside service; b. A drive-through sales window; or c. A delivery service. 11. Sell cannabis products to a person who is visibly intoxicated; 12. Sell or give away pressurized containers of butane, propane, carbon dioxide, or other materials that could be used for extraction purposes in the home production of cannabis concentrate, except that a dispensary may sell or give away disposable butane lighters; 13. Sell any edible cannabis product that is molded to contain an image or character designed or likely to appeal to minors, such as images or characters that are cartoons, toys, animals, or children; 14. Sell cannabis products that are packaged in a manner that is designed to or likely will appeal to minors, including but not limited to the use of packaging that resembles popular candy brands or contains images or characters that are cartoons, toys, animals, or children; 15. Sell cannabis trim or flower that has a potency of more than thirty percent (30%) THC or cannabis edibles, tinctures, oils, or concentrates with a potency of more than sixty percent (60%); 16. Allow cardholders or caregivers to be present on the licensed premises or sell to a cardholder during any hours not permitted on the operating plan; 17. Conduct any activities during hours or on days not authorized in the licensee's operating plan; 18. Sell or transfer returned or recalled cannabis product to another cardholder or caregiver; 19. Allow a cardholder or caregiver to open or alter a package containing cannabis product or otherwise remove cannabis product from packaging required within the premises or in an area that the licensee controls; 20. Allow a cardholder or caregiver to bring cannabis products onto the premises except for cannabis products being returned for refund or exchange; 21. Engage in the sale of cannabis products if mandatory testing is not verified or verifiable with a certificate of analysis, if testing reports unsafe levels of potentially harmful substances, or if testing reports THC levels higher than those allowed by law; 22. Mechanically or chemically extract THC from cannabis or possess, sell, or store devices on the premises that can be used for this purpose. 101 (Reserved)

35.XI.24 revised effective December 1, 2025

Chapter 25 Records Required to Be Kept for Current Year and Three (3) Proceeding Calendar Years

Page 23 of 30

35 Miss. Admin. Code Pt. 11, R. 100 Rule 100

The following records shall be maintained in physical and/or electronic format for a minimum of three (3) years: 1. Records regarding the disposal of cannabis products. 2. General Business Records, including purchase and sales information. 3. Records of all required inventory reports. 4. Records of each transaction, including the amount of cannabis product dispensed, the amount of compensation received, and the registry identification number of the qualifying patient or designated caregiver. 5. Personnel Records.

35 Miss. Admin. Code Pt. 11, R. 101 Rule 101

General Business Records shall include itemized invoices for all cannabis products purchased, sales made, all bank statements and canceled checks, and all other books and accounts as may be necessary to determine the financial position of the business. All itemized purchase invoices and tickets shall bear the items purchased, the date of purchase, name of the seller and purchaser. Cash register tapes may not be used in lieu of itemized invoices for record purposes. 102 All required records will be adequate in substance to conform with generally accepted accounting practices. All records will be open for examination by the Department during regular business hours.

35 Miss. Admin. Code Pt. 11, R. 103 (Reserved)

35.XI.25 revised effective July 1, 2022

Chapter 26 Transportation of Cannabis

35 Miss. Admin. Code Pt. 11, R. 100 Rule 100

A dispensary shall adhere to all applicable Department of Health transportation requirements when receiving or shipping medical cannabis.

35 Miss. Admin. Code Pt. 11, R. 101 (Reserved)

35.XI.26 revised effective December 1, 2025

Chapter 27 Duty to Report

35 Miss. Admin. Code Pt. 11, R. 100 Rule 100

Each licensee employee is responsible for monitoring for unusual usage, or questionable disposition of medical cannabis. Each dispensary employee, immediately upon discovery of any fraudulent or otherwise unlawful recommendation, unusual usage, or questionable disposition will notify the Department. 101 Each dispensary employee shall notify the Department within twenty-four (24) hours upon discovery of the theft or loss of any cannabis product in transit that was either shipped from or to the dispensary.

Page 24 of 30

35 Miss. Admin. Code Pt. 11, R. 102 Rule 102

Cannabis product thefts or unexplained losses must be reported to the Department in writing irrespective of whether the cannabis or cannabis product is recovered and/or the responsible parties are identified and action taken against them. Written reports must be provided to the Department within forty-eight (48) hours following the discovery of such theft or loss. 1. The written report must include: a. The name, address, and license number of the dispensary; b. The amount and type of cannabis product lost or stolen; c. The circumstances surrounding the loss or theft; d. The date the loss or theft was discovered; e. The person who discovered the loss or theft; f. The person responsible for the loss or theft if known; and g. Any other information that the reporter believes might be helpful in establishing the cause of the loss or theft. 2. An exemption may be obtained upon sufficient cause if the report cannot be completed within forty-eight (48) hours. 3. A request for waiver of the forty-eight (48) hours limit must be requested in writing. 103 All dispensary employees must report all known violations of state drug laws or Medical Cannabis regulations issued by this Department or the Department of Health to the Department immediately.

35 Miss. Admin. Code Pt. 11, R. 104 Rule 104

Regulatory violations related to security and/or administration of cannabis products that a dispensary employee knows or reasonably should know shall be reported to the Department within twenty-four hours.

35 Miss. Admin. Code Pt. 11, R. 105 (Reserved)

35.XI.27 revised effective December 1, 2025

Chapter 28 Schedule of Disciplinary Actions

35 Miss. Admin. Code Pt. 11, R. 100 Rule 100

In addition to any applicable criminal actions, the following schedule shall be used when administratively disciplining dispensaries for violating statutory and/or regulatory requirements. The Department reserves the right to modify penalties based on facts and circumstances. Graduating penalties as a result of multiple violations within a given time period shall be based on a rolling two-year period.

Violation First Offense Second Offense Third Offense Failure of an employee to possess an active work permit $1,000 $2,000 $3,000 and/or one week suspension Employment of someone under the age of 21 or with a disqualifying felony $1,000 $2,000 $3,000 and/or one- week suspension

Page 25 of 30

Failure to assist Department during the recall of product $1,000 $2,000 and/or one- week suspension $3,000 and/or two- week suspension Failure to comply with approved security plan $1,000 $2,000 and/or one- week suspension $3,000 and/or two- week suspension On-site use of cannabis or alcohol $1,000 $2,000 and/or one- week suspension $3,000 and/or two- week suspension Permitting access to a non- cardholder under the age of

$1,000 $2,000 and/or one- week suspension $3,000 and/or two- week suspension Sale of topical product to a person under the age of 21 $1,000 $2,000 and/or one- week suspension $3,000 and/or two- week suspension Extraction of THC on- premises or possession, sale, or storage of equipment that may be utilized for this purpose $2,000 $3,000 and/or one- week suspension $5,000 and/or two- week suspension Unlawful acquisition, transfer, purchase, or sale of a product unless otherwise listed $2,000 $3,000 and/or two- week suspension Revocation Sale in amounts exceeding applicable limits or type $500 per MMCEU over the applicable allotment amount Negligent failure to accurately track inventory and/or maintain records $1,000 $2,000 and/or one- week suspension $3,000 and/or two- week suspension Willful failure to accurately track inventory and/or maintain records $2,000 and/or one-week suspension $3,000 and/or two- week suspension Revocation Falsification of records $2,000 and/or one-week suspension $3,000 and/or two- week suspension Revocation Sale to non-cardholder of non- topical product $2,000 and/or one-week suspension $3,000 and/or two- week suspension Revocation Refusal to permit access by ABC Agents as required by law Two-week suspension Revocation A threat against law enforcement Two-week suspension Revocation Opening a dispensary to patients during a license suspension period Revocation Improper Entry of Patient Information $500 per instance

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General Penalty if not specifically listed $5,000

35.XI.28 revised effective March 4, 2025

Chapter 29 Appeal Process for Medical Cannabis Dispensaries

35 Miss. Admin. Code Pt. 11, R. 100 Rule 100

The Department may fine, suspend, or revoke a Medical Cannabis Dispensary License at its discretion for a violation of the Mississippi Medical Cannabis Act or any rules and regulations by the licensee or any of its employees or agents. The Department may also deny an application for a Medical Cannabis Dispensary License for failure to meet the qualifications under the Mississippi Medical Cannabis Act or any promulgated rules and regulations. If a licensee or applicant wishes to appeal this decision, the licensee or applicant shall file its administrative appeal within twenty (20) days of receipt of the initial notice. The Review Board shall then conduct a hearing on the record, at which time the burden shall be on the licensee or applicant to prove that the Department’s decision was: 1. Unsupported by substantial evidence; 2. Arbitrary or capricious; 3. Beyond the power of the administrative agency to make; or 4. Violated some statutory or constitutional right of the aggrieved party.

35 Miss. Admin. Code Pt. 11, R. 101 Rule 101

The Department shall provide its initial notice of suspension, revocation, fine, or other sanction by personal delivery or mailing by certified mail, signature required, to the medical cannabis dispensary at the address on the registration certificate. Additionally, the Department shall provide its initial notice of denial by personal delivery, mailing by certified mail, signature required, or by electronic mail to the applicant at the physical or electronic address listed in the application. If the licensee or applicant fails to appeal the initial notice within the prescribed time, the decision becomes final and cannot be further appealed.

35 Miss. Admin. Code Pt. 11, R. 102 (Reserved)

35 Miss. Admin. Code Pt. 11, R. 200 Appeal to Review Board

35 Miss. Admin. Code Pt. 11, R. 201 Rule 201

A licensee or applicant who disagrees with an action taken by the Department regarding a Medical Cannabis Dispensary License shall have the option of requesting a hearing before the Review Board by filing an appeal. This appeal must be submitted, in writing, to the Review Board within twenty (20) days of receipt of the initial notice. A Review Board Appeal Petition, which can be found on the Department’s website, may be used to make the appeal.

35 Miss. Admin. Code Pt. 11, R. 202 Rule 202

Upon timely receipt of a written request from the licensee, applicant, or authorized representative, the Review Board shall promptly schedule a hearing for consideration of the appeal.

Page 27 of 30

35 Miss. Admin. Code Pt. 11, R. 203 Rule 203

A licensee, applicant, or authorized representative will be notified of the hearing by mail at the last known address. The last known address will be the mailing address provided in the written request for appeal or any subsequent address change notification to the Review Board. The hearing notice will contain the time, place, and date of the hearing. Notice to the licensee/applicant’s authorized representative constitutes notice to the licensee/applicant.

35 Miss. Admin. Code Pt. 11, R. 204 Rule 204

Due to the confidentiality provisions of the Mississippi Medical Cannabis Act, these proceedings are not open to the public.

35 Miss. Admin. Code Pt. 11, R. 205 Rule 205

When an appeal or other document is required to be filed with the Review Board within any number of days, the day of the act, event, or default from which the designated period of time begins to run shall not be included. The last day of the period so computed shall be included unless it is a Saturday, a Sunday, a legal holiday, or any other day when the offices of the Department are in fact closed, with or without legal authority, in which event the period runs until the end of the next day which is not a Saturday, a Sunday, a legal holiday, or any other day when the office of the Department is closed. Legal holidays for the Department are found at Miss. Code Ann. Section 3-3-7(1). Mailing does not constitute filing, and the time period within which the appeal, objection, or other document has to be filed is not extended because of mailing.

35 Miss. Admin. Code Pt. 11, R. 206 Rule 206

The Department retains the authority to change its decision regarding any action taken.

35 Miss. Admin. Code Pt. 11, R. 207 Rule 207

An appeal under the Mississippi Medical Cannabis Act before the Review Board may be withdrawn at any time by the person filing the appeal. The withdrawal may be made voluntarily by the person or may occur involuntarily under the conditions listed below.

35 Miss. Admin. Code Pt. 11, R. 208 Rule 208

An involuntary withdrawal of an appeal may occur as a result of the person's failure to appear at a scheduled hearing, failure to timely provide a written appeal in lieu of attendance at a hearing, or by any other act or failure that the body hearing the appeal determines is a failure on the part of the person to prosecute the appeal. An involuntary withdrawal will be documented in the minutes providing the basis of the withdrawal.

35 Miss. Admin. Code Pt. 11, R. 209 Rule 209

A voluntary withdrawal of an appeal must be delivered in writing by the licensee, applicant, or authorized representative to the Chairman of the Review Board prior to the scheduled time of the hearing on the appeal.

35 Miss. Admin. Code Pt. 11, R. 210 Rule 210

Following the withdrawal of an appeal, the action shall become final and not subject to further review by the Review Board or a court. The Department shall then proceed with any action in accordance with the law.

35 Miss. Admin. Code Pt. 11, R. 211 (Reserved)

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35 Miss. Admin. Code Pt. 11, R. 300 Conduct of Hearing before the Review Board

35 Miss. Admin. Code Pt. 11, R. 301 Rule 301

The Review Board shall convene and hear appeals regarding actions taken by the Department under the Mississippi Medical Cannabis Act.

35 Miss. Admin. Code Pt. 11, R. 302 Rule 302

Since an official transcript is to be made of the hearing of an administrative appeal covered by this Chapter, the Review Board will only consider the testimony and documents introduced into evidence at the hearing, the facts and documents stipulated to by the parties, and the facts of which it can take judicial notice.

35 Miss. Admin. Code Pt. 11, R. 303 Rule 303

If a party offers testimony at a hearing through the examination of a witness or where a party representing himself testifies at the hearing by making a statement, the person so testifying shall be sworn in by the presiding Review Board member or the court reporter. Any other party to the administrative appeal shall be entitled to cross-examine the person testifying and any Review Board member may ask questions of this person.

35 Miss. Admin. Code Pt. 11, R. 304 Rule 304

The Mississippi Rules of Civil Procedure do not apply to hearings before the Review Board. The Mississippi Rules of Evidence will apply but they will be relaxed. Relevant hearsay evidence may be presented and introduced into evidence unless the presiding Review Board member determines that such evidence lacks trustworthiness.

35 Miss. Admin. Code Pt. 11, R. 305 Rule 305

If the Department determines after the action that there are additional and/or different facts and/or charges on which to base the action being appealed, these additional and/or different facts and/or charges may be used by the Department in an administrative appeal under the Mississippi Medical Cannabis Act to support its action, if the Department provides the licensee/applicant with reasonable notice of such facts and charges before the hearing in the administrative appeal.

35 Miss. Admin. Code Pt. 11, R. 306 Rule 306

Any party offering a document into evidence at the hearing before the Review Board in an administrative appeal covered by this Chapter shall provide all other parties to the administrative appeal with a copy of the document before or at the time that the document is offered into evidence, as directed by the Review Board.

35 Miss. Admin. Code Pt. 11, R. 307 Rule 307

Unless otherwise directed by the presiding Review Board member, a hearing in an administrative appeal covered by the Mississippi Medical Cannabis Act shall be conducted in the following order: 1. The presiding Review Board member shall call the hearing to order. 2. The presiding Review Board member shall state the style of the administrative appeal being heard, the nature of the administrative appeal, and a summary of the action from which the administrative appeal was filed. 3. The presiding Review Board member or the court reporter shall swear in all witnesses, including any party, who expects to testify at the hearing. 4. If requested by a party or upon the presiding Review Board member's own initiative, all witnesses shall be excluded from the hearing room to a location where they cannot

Page 29 of 30

hear the testimony of other witnesses in the hearing, except for those witnesses who are either a natural person who is a party to the administrative appeal or an officer or employee of a party which is not a natural person and who has been designated by the party's attorney to be the party's representative at the hearing. 5. Any stipulation of facts and/or documents between the parties shall be admitted into evidence. 6. Each party shall be given the opportunity to make an opening statement. 7. The Department shall present its evidence. 8. The licensee or applicant, who filed the written appeal with the Review Board initiating the administrative appeal, shall present the evidence. 9. Upon request by a party, and only on approval and subject to any restrictions of the presiding Review Board member, the parties may be allowed to present additional evidence after the close of the licensee/applicant’s case. 10. Each party shall be given the opportunity to make a closing argument; and 11. Upon conclusion of all arguments and evidence, the presiding Review Board member shall bring the hearing to a close.

35 Miss. Admin. Code Pt. 11, R. 308 (Reserved)

35 Miss. Admin. Code Pt. 11, R. 400 Order(s) issued by the Review Board

35 Miss. Admin. Code Pt. 11, R. 401 Rule 401

Following the hearing, the Review Board shall issue its Order in due course. If an Order of the Review Board regarding the Mississippi Medical Cannabis Act is not appealed within twenty (20) days after the issuance of said Order, that Order becomes final and is not subject to further appeal.

35 Miss. Admin. Code Pt. 11, R. 402 Rule 402

Any person aggrieved by a decision of the Review Board shall have a right of appeal to the circuit court of the county of the residence of the licensee or applicant as it appears on the record.

35 Miss. Admin. Code Pt. 11, R. 403 (Reserved)

35 Miss. Admin. Code Pt. 11, R. 500 Appeal of Review Board Order to Circuit Court

35 Miss. Admin. Code Pt. 11, R. 501 Rule 501

If an appeal to the Review Board is made by a licensee or applicant, the Order of the Review Board shall constitute the final decision of the Department.

35 Miss. Admin. Code Pt. 11, R. 502 Rule 502

Any licensee or applicant aggrieved by a final decision of the Department under the provisions of this Chapter may petition for judicial review of the final decision.

35 Miss. Admin. Code Pt. 11, R. 503 Rule 503

The petition shall be filed within twenty (20) days after the issuance of the Department’s final decision. The petition shall be filed in the circuit court of the county in which the appellant resides. If the appellant is a nonresident of this state, the appeal shall be made to the Circuit Court of the First Judicial District of Hinds County, Mississippi. Before filing

Page 30 of 30

a petition, the licensee or applicant must first request an estimate of the cost from the Department to prepare the entire record and shall pay the amount of the estimate. Failure to pay this estimate before filing a petition shall result in the matter being dismissed with prejudice. The Department will transmit the record to the applicable court upon receipt of payment from the appellants.

35 Miss. Admin. Code Pt. 11, R. 504 Rule 504

Any person or entity aggrieved by the decision of the circuit court may appeal to the Mississippi Supreme Court.

35 Miss. Admin. Code Pt. 11, R. 505 (Reserved)

35.XI.29 revised effective December 1, 2025