Instructions For Mississippi Combination Return Of Corporate Income And Franchise Tax (Page 2 of 2) in pdf

shall in no case be less than the assessed

"doing business" within this state, the Mississippi taxable income of the taxpayer, where

value of the Mississippi property of the

separate accounting is or can be maintained on each division, shall, at the election of the

organization for the year preceding the

Commissioner, be determined on a divisional basis in lieu of a company-wide accounting

year in which the return is due.

basis. See Regulation 806.

(2) (a) For the purpose of this section, for tax returns for tax years

CONSOLIDATED OR COMBINED INCOME TAX RETURNS FOR

ending before January 1, 1999, an organization which uses a

AFFILIATED GROUP OF CORPORATIONS

formula method of apportionment in making income tax returns to

Under certain conditions and limitations, an affiliated group of corporations shall have the

this state shall determine its gross receipts from business carried on

privilege of making, or the Commissioner may require, a consolidated or combined return

in Mississippi by applying to total unitary receipts the ratio

for the tax year in lieu of separate returns. Mississippi Regulation 807 shall govern with

achieved, or which would be achieved, by such formula and adding

respect to the manner and basis for filing consolidated or combined returns of an affiliated

to the result of such application any nonunitary Mississippi

group of corporations.

receipts.

EACH corporation of an affiliated group of corporations eligible for and electing to file

(b) For the purpose of this section, for tax returns for tax years

in a combined income tax return must file its own Mississippi corporate income tax return

ending on or after January 1, 1999, the gross receipts of an

(Form 83-105) and each corporation must complete and attach to their respective return

organization that is required to use a formula method of

all applicable schedules including the schedule for computation of net income (loss), Form

apportionment in making income tax returns to this state shall be

83-122.

the same (both as to gross receipts from business carried on in

Mississippi and gross receipts wherever located) as the gross

One corporation of the group of corporations must be designated as the Reporting

receipts (or sales) used for the receipts or sales factor in the

Corporation for purposes of reporting income(loss) for the group. This is indicated on page

applicable income tax formula. However, gross receipts from

1, line 3, of Form 83-105. In addition to the regular income tax return, the designated

business carried on in Mississippi, for the purposes of this section,

Reporting Corporation must complete and attach to its return Form 83-310, Summary of

shall also include any receipts from the taxpayer's business

Net Income of Corporations. (Please refer to instructions on Form 83-310). The combined

operations which are not apportioned but rather are directly

net income (loss) (Form 83-310, column C) of the affiliated group must be reported by the

allocated or assigned to this state. If the taxpayer is required to use

Reporting Corporation on its return by entering such amount on page 1, line 4, Form 83-

a formula method of apportionment in making income tax returns

105. Other included members of the group should enter "zero" on page 1, line 4, Form 83-

which does not have a receipts or sales factor, then the receipts

105 and must indicate the name and I.D. number of the Reporting Corporation in the space

factor for the franchise tax formula shall be determined by

provided.

regulation of the commission.

A Mississippi consolidated tax return is where two or more 100% Mississippi corporations

The amount of capital apportioned to Mississippi is computed on line 14, Form 83-110.

file as one corporation for income tax purposes. Form 83-310 is not filed in this case, as

only one income tax return is being filed by the reporting corporation for the group.

The section of Form 83-110 concerning the assessed values of all real and personal

property in Mississippi must be completed by all corporations. Sections 27-13-9 and 27-13-

Consolidated or combined reporting is authorized only with respect to the income tax levy.

13, Mississippi Code of 1972, provide that the amount of the determined capital in

Mississippi law does NOT authorize consolidated or combined reporting for franchise tax;

Mississippi shall in no case be less than the assessed value of the Mississippi property of

therefore, separate returns are required of all corporations chartered to do business in

the corporation for the year preceding the year in which the return is due.

Mississippi or which are in fact doing business in Mississippi.

Taxable capital and the net franchise tax due are calculated on lines 16 through 20 of Form

Mississippi income tax due on the combined net income of the affiliated group must be

83-110. The amount of taxable capital shown on line 17 should be entered on line 1, Form

determined and reported by the Reporting Corporation. In case of delinquency or failure

83-105. The net franchise tax due as shown on line 20 should be entered on line 2, Form

on the part of the Reporting Corporation to report and pay the income tax due, each

83-105.

included member of the affiliated group is severally liable for the tax on a consolidated or

combined return and for any determined deficiency thereon.

INSTRUCTIONS FOR COMPUTING TAXABLE INCOME

An affiliated group of corporations required by the Commissioner to file a consolidated or

Generally, all domestic and foreign corporations having income from sources within

combined income tax return must do so in accordance with the provisions of Mississippi

Mississippi must complete Form 83-122, Computation of Net Taxable Income Schedule,

Regulation 807, or from specific instructions from the Commissioner.

which makes adjustments for additions to and deductions from Federal ordinary income

due to differences in Federal and Mississippi laws, in arriving at the net income (loss) for

NET OPERATING LOSSES

State purposes.

For any taxable year ending after December 31, 1997, the period for net operating loss

Total Assignment of Income. If the business activity in respect to any trade or business

carrybacks and net operating loss carryovers shall be the same as those established by the

of the corporation occurs within this state, and if by reason of such business activity the

Internal Revenue Code and the rules, regulations, rulings and determinations promulgated

corporation is not taxable in another state, the total net income (loss) of the corporation is

thereunder. §27-7-17(1)(l) of the Mississippi Code of 1972, as amended, was amended so

assigned to Mississippi.

that when the Internal Revenue Code loss carryback and carryforward periods change, the

Mississippi carryback and carryforward will change as well.

Direct or Separate Accounting. Any taxpayer, taxable both within and without this State,

which maintains or could maintain books of account detailing allocation of receipts and

For years ended on or before December 31, 1997 the following applies: A net operating

expenditures reflecting clearly the business income attributable to property owned or

loss for any tax year ending after December 31, 1991, could be carried back to the taxable

business done in this State, shall determine Mississippi net business income (loss) from

year preceding the year of the loss. A net operating loss for any tax year ending after

such business activity on the basis of direct or separate accounting. See Regulation 806

December 31, 1992, can be carried back to the 2 taxable years preceding the year of the

for guidelines and details. Multistate entities filing direct accounting must complete Form

loss. A net operating loss for any tax year ending after December 31, 1993, can be carried

83-124, Direct Accounting Income Statement. Multistate construction contractors must

back to the 3 taxable years preceding the year of the loss. Carry the net operating loss to

complete page 2 of Form 83-124.

the earliest year first. A short taxable year counts as a taxable year. A taxpayer can elect

to relinquish the entire carryback period with regard to a net operating loss from an eligible

Apportionment of Business Income. If the business activity in respect to any trade or

year, but once this election is made, it cannot be changed.

business of a taxpayer occurs both within and without this state, and if by reason of such

business activity the taxpayer is taxable in another state, the portion of the net income (loss)

Prior to January 1, 1992, Mississippi allowed a 5 year NOL carryforward but no

arising from such trade or business which is derived from sources within this state, shall,

carryback.

where direct or separate accounting of net income (loss) is not feasible, be determined by

Form 83-155 or other comparable schedule must be attached, or the NOL will not

apportionment in accordance with the formulas prescribed by Regulation 806. In such case,

be allowed.

the taxpayer must complete Form 83-125, Mississippi Business Income Apportionment

Schedule.

CAPITAL GAINS AND LOSSES

Allocation of Nonbusiness Income. Nonbusiness income (loss) shall be allocated by

The Federal Schedule D and Federal Form 4797 cannot be used for the Mississippi return,

multistate corporations within and without this state in accordance with the provisions of

but the federal forms have been replaced with similar state forms. Federal Schedule D has

Regulation 806.

been replaced by state Form 83-135. Federal Form 4797 has been replaced by state Forms

83-140 and 83-145. The reason for this is that for state purposes some types of gains and

Divisional Accounting. If the business activity in respect to any trade or business of a

taxpayer is conducted on a division basis and division or divisions of the taxpayer are

Instructions For Mississippi Combination Return Of Corporate Income And Franchise Tax Page 2

Related Articles

Related forms

Related Categories