Registration Requirements in Mississippi
Mississippi Business Services Division has created a Business One Stop Shop (BOSS) portal for new businesses to meet all registration requirements. A link to the BOSS portal can be found here.
S-Corporation Income Tax
Mississippi recognizes the federal S-election, and Mississippi S corporations are not required to pay income tax to the state. However, individual S corporation shareholders will owe state tax on their share of the company’s income. S corporations in Mississippi are subject to the corporate franchise tax, and must file Form 84-105.
LLC/Partnership Income Tax
Not required to pay income tax to Mississippi. Business income is passed to partners who pay Mississippi income tax on their personal return. Partnerships in Mississippi must file Form 84-105.
Corporate Franchise/Privilege Tax
The corporate franchise tax, which applies to both C corporations and S corporations, is based on a business’ net worth. The tax is computed at $2.50 per $1,000 of the greater of:
Capital Used, invested, or employed in the state; or
The total assessed value on the property in the state.
There is a minimum franchise tax of $25.
Nonresident individuals/partners without any activity in Mississippi other than that from the pass-through entity may elect to be included in a composite filing.
Individual Income Tax
Mississippi has a selective conformity with the Internal Revenue Code and adopts only certain IRC provisions, certain provisions as of a specific date, or makes certain material changes to key IRC provisions.
Unlike most other states, Mississippi does not base its personal income tax computation on the federal income tax calculation. Instead, it has its own provisions for the determination of gross income, adjustments, and deductions.
Mississippi's standard deduction is:
$4,600 for married individuals filing a joint or combined return;
$2,300 for a married individual who is filing a separate return;
$3,400 for an individual who is filing head of family; or
$2,300 for a single individual.
You do have the option of using a state defined itemized deduction.
Mississippi does allow personal and dependent exemptions. Here are the amounts.
Married Filing Joint $12,000
Mississippi does not conform to the Internal Revenue Code (IRC) section 199A, also known as the QBI deduction.
Individual income tax is based on a graduated tax rate.
The graduated income tax rate is:
0% on the first $2,000 of taxable income
3% on the next $3,000 of taxable income
4% on the next $5,000 of taxable income
5% on all taxable income over $10,000
For combined returns, tax liability can be calculated separately then added together.
CARES Act Guidance
Mississippi decouples from all CARES Act provisions.
Pass through entity returns are due on the 15th day of the third month following the close of the tax year. For most filers this will be March 15th.
Individual income tax returns are due on the 15th day of the fourth month following the close of the tax year. For most individuals the due date will be April 15th.
If the due date falls on a weekend or legal holiday, the due date is extended to the next business day.
Every taxpayer, filing a composite return, with an annual income tax liability in excess of $200 must make estimated tax payments.
Every individual taxpayer who does not have at least eighty percent of their annual tax liability prepaid through withholding must make estimated tax payments if his/her annual tax liability exceeds two hundred dollars.
Filing an Extension
S corporations and Partnerships/LLC’s can use Mississippi Form 83-180 to apply for an extension.
Individuals can use Mississippi Form 80-106 to apply and make an extension payment.
The penalty imposed for failure to file a return is 5% per month not to exceed 25% in the aggregate.
If your business was formed or is located in another state, but generates income in Mississippi, it may be subject to Mississippi taxes. The rules for taxation of multistate businesses, including what constitutes nexus with a state for the purpose of various taxes, are complicated. If you run such a business, you should consult with a tax professional.