Instructions For Mississippi Combination Return Of Corporate Income And Franchise Tax
ADVERTISEMENT
1
2deductions as requested on other statements made a part of the return, and details of
Mississippi, such organization receives the benefit and protection of the government
nonbusiness income or loss directly allocable to Mississippi and other business income or
and laws of the state.
loss as requested on the computation of net income schedule, detail of other assets, other
Insurance companies must file their income tax returns on Form 85-391.
current liabilities and other liabilities in the balance sheet as are normally included with the
TIME AND PLACE FOR FILING
federal return.
The Mississippi combination return of corporate income and franchise tax must be filed
The purpose of this penalty provision is to ensure that sufficient information is disclosed
with the Commissioner on or before the fifteenth day of the third month following the close
on the return to assure the collection of the correct tax due. If a minor schedule is
of the accounting year. If the due date falls on a Saturday, Sunday, or legal holiday, file on
inadvertently omitted one time from the tax return, the penalty will not be imposed; but if
the next business day. A business day is any day that is not a Saturday, Sunday, or legal
major schedules (such as the balance sheet) are omitted or incomplete, or if schedules are
holiday. The return should be sent to: Office of Revenue, P. O. Box 23050, Jackson,
consistently omitted or incomplete, then the penalty will be imposed. The more severe or
Mississippi 39225-3050. If filing a final return, combined return, or amended return send
consistent the omission, the more likely it is that the penalty will be imposed.
to: Office of Revenue, P.O. Box 1033, Jackson, MS 39215-1033.
PERIOD COVERED BY THE RETURN
RATES OF TAX
Returns shall be filed on the basis of the 12-month accounting period established by the
(a) Franchise tax - $2.50 per $1,000, or fractional part thereof, of capital, surplus,
corporation. A corporation on a fiscal year basis must enter the beginning and ending dates
undivided profits and true reserves employed in Mississippi. (Minimum tax of $25)
of the taxable year in the appropriate spaces. No accounting period, other than calendar
year, will be recognized, unless before its close it was definitely established as an
(b) Income Tax - 3% on the first $5,000 of taxable income, 4% on the next $5,000 of
accounting period by the taxpayer and the books of such taxpayer were kept in accordance
taxable income, and 5% on taxable income in excess of $10,000.
therewith. No accounting period shall be changed without the approval of the
WHO MUST SIGN
Commissioner.
The return must be signed by the president, vice president or other officer of the
PAYMENT OF TAX
corporation. A receiver, trustee, or assignee must sign any return which he/she is required
to file on behalf of a corporation.
The total tax due on the combination return must be paid by the due date, not necessarily
the due date of the tax return. For franchise tax, the due date is the due date of the return;
INSTRUCTIONS FOR DETERMINING FRANCHISE TAX
for income tax the due date is the due date of income tax estimated payments (which must
The franchise tax is measured by the value of capital used, invested or employed in the
be not less than 90% of the annual income tax liability), and the balance by the due date
exercise of any power, privilege or right enjoyed by the corporation within Mississippi.
of the tax return. Due dates are determined without extensions.
The mode of measurement is the amount of capital of the corporation employed or so
EXTENSION OF TIME TO FILE RETURN
situated as to be privileged to be employed in the state. In determining the amount of
capital, the net book value as regularly employed in conducting the affairs of the
The Commissioner may grant a reasonable extension of time beyond the statutory due date
corporation shall be accepted as prima facie correct as to the true capital of the corporation,
to file any income/franchise tax return. THE AUTHORIZED EXTENSION OF TIME
except where the Commissioner determines that the book value does not properly reflect
TO FILE DOES NOT EXTEND THE TIME FOR PAYMENT OF THE INCOME
capital employed in this state and in that situation the Commissioner's determination of
OR FRANCHISE TAX DUE. INTEREST and PENALTY shall apply on any
capital shall be prima facie correct.
UNDERPAYMENT OF TAX. Taxpayers having a tax liability who request an
extension of time must remit the tax due with their Mississippi application for extension.
Form 83-110, Corporate Franchise Tax Schedule, must be completed by all corporations
Corporations may submit Form 83-180 on or before the due date of their returns, including
indicating the amount of capital of the corporation. All reserves which do not represent
remittance for any remaining tax liability, and receive an automatic extension of time to
definitely known and fixed liabilities must be considered as elements of capital of the
file their tax returns.
corporation. Amounts designated for payment of dividends may not be excluded unless
such amounts have been definitely and irrevocably placed to the credit of the stockholder,
If no tax liability exists on the due date of the return, the Commissioner may recognize an
subject to withdrawal on demand. Sums representing debts, notes, bonds, mortgages due
extension of time authorized and granted by the Internal Revenue Service for the filing of
and payable, depreciation reserves, bad debt reserves, or reserves representing valuation
annual income tax returns. A copy of the extension of time to file shall be attached to the
accounts may be excluded (unless between affiliated companies or shareholders).
Mississippi return as authority for the extension for filing the return.
Attention: Multistate Taxpayers
INTEREST AND PENALTY PROVISIONS
Lines 10 through 13 of Form 83-110 must be completed by multistate corporations doing
Late Payment - Interest at the rate of 1% per month from the regular due date until paid,
business both within and without Mississippi. Total capital of a multistate corporation is
is due on the amount of unpaid tax whenever such is not paid on the regular due date, even
apportioned to Mississippi in the ratio that real and tangible personal property owned in
though an extension of time to file the return has been granted or authorized. The penalty
Mississippi and gross receipts from business carried on in Mississippi bears to the total real
imposed for failure to pay the tax when due is 1/2% per month based on tax not paid by the
and tangible personal property owned by the corporation and gross receipts wherever
due date not to exceed 25% in the aggregate.
located and from wherever received. All franchise tax returns that have a year ending
on or before December 31, 1998 will calculate the Mississippi receipts for franchise
Late or Non-Filers - Penalties are imposed for failure to file a return or to pay the tax
taxes in the same manner as in previous years. Starting for years ending on or after
when due. The penalty imposed for failure to file a return is 5% per month not to exceed
January 1, 1999, taxpayers that apportion their income to Mississippi using an
25% in the aggregate. The penalty imposed for failure to file is based on the additional
apportionment method that includes a sales or receipts ratio will no longer use the
amount of tax due, not total tax due on the return. Such failure to file a return penalty shall
income tax ratio to calculate the Mississippi receipts for the franchise tax
not be less than $100.
apportionment ratio.
They will use the same receipts in the franchise tax
Incomplete Returns - A corporation that does not file a complete return or does not file
apportionment ratio as used in the income tax sales ratio and then add to both the
a return within the prescribed time may be subject to a penalty of $25 per required
numerator and denominator any non apportioned income. Those taxpayers whose
attachment or schedule up to a maximum of $500 per return.
income tax ratio does not include a sales or receipts ratio must continue to use the
income tax ratio to calculate the Mississippi receipts in the franchise apportionment
To be a complete return, a return should contain all the requisite general information, as
formula. Those taxpayers that use direct accounting or have only allocable Mississippi
well as all summary tax information and the basic back up schedules.
income will continue to use the same receipts as before.
Examples of the required general information are complete name, current address, ID
The Mississippi Code that was amended is as follows:
number, description of product or services, officer's signature, and other information
27-13-13. (1) In the case of organizations doing business both
relating to the filing entity as requested on page 2 of Form 83-105.
within and without Mississippi, the value of the capital employed
Examples of the summary tax information are the front page of the return, the computation
in this state shall be determined by first computing the ratio
of net income, the franchise tax schedules, the computation of the apportionment factor
between (1) the real and tangible personal property owned in
(if income is apportioned), the balance sheet, the direct accounting income statement (if
Mississippi and gross receipts from business carried on in
applicable), reconciliation of tax income with book income, schedules showing the
Mississippi, and (2) the total real and tangible personal property
computation of any tax credit taken (such as jobs credit) and schedules showing the
owned and gross receipts wherever located and from wherever
computation of any major item in the return.
received. Said ratio then shall be applied to the total capital stock,
surplus, undivided profits and true reserves and the result of that
Examples of the basic backup schedules are details of other additions or other deductions
application shall be the capital employed in this state. Provided,
as requested on the computation of net income schedule, details of other additions or other
however, that the amount of the determined capital in Mississippi
2
ADVERTISEMENT
0 votes
Related Articles
Related forms
Related Categories
Parent category: Financial