2025 Form 84-100 Mississippi Pass-Through Entity Instructions (electing PTE, composite, S-corp franchise)

Form 84-100-22-1-1-000(Rev.01/26)

PASS-THROUGH ENTITY
INCOME AND FRANCHISE TAX
INSTRUCTIONS

INCOME AND FRANCHISE TAX BUREAU
PO BOX 1033
JACKSON, MISSISSIPPI 39215-1033

November 2025

# TABLE OF CONTENTS

GENERAL INFORMATION AND INSTRUCTIONS 3
NEW LEGISLATION 3
WHO MUST FILE 3
DEFINITIONS 4
TERMINATION OF S CORPORATION ELECTION 4
TIME AND PLACE FOR FILING 4
ELECTRONIC FILING 4
TAXPAYER ACCESS POINT (TAP) 4
WHO MUST SIGN 5
REQUIRED FORMS AND SCHEDULES 5
TAX PAYMENTS 5
ESTIMATED TAX PAYMENTS 6
INTEREST AND PENALTY PROVISIONS 6
ACCOUNTING METHODS 6
ACCOUNTING PERIOD 6
ROUND TO THE NEAREST DOLLAR 6
RECORDKEEPING 7
TAX RATES 7
AMENDED RETURN 7
TREATMENT OF DISREGARDED ENTITIES 7
FRANCHISE TAX (S CORPORATIONS) 8
INCOME TAX 9
INSTALLMENT SALES 9
INTANGIBLE AND INTEREST EXPENSES 9
ARMS-LENGTH TRANSACTIONS 9
LONG TERM CAPITAL GAINS FROM SALES OF STOCK 9
EXTRATERRITORIAL INCOME 9
APPORTIONMENT/ALLOCATION 9
NET OPERATING LOSS (NOL) 10
PRODUCERS OF MINERAL OR NATURAL RESOURCE PRODUCTS 10
UNRELATED BUSINESS TAXABLE INCOME - EXEMPT ORGANIZATIONS 10
INCENTIVE CREDITS AND EXEMPTIONS 11
SPECIFIC INSTRUCTIONS 17
FORM 84-105 17
FORM 84-122 18
FORM 84-131 20
FORM 84-132 20
FORM 84-150 21
FORM 84-155 21
FORM 83-305 21
COMPOSITE FILING 22
ELECTING PASS-THROUGH ENTITY 22
DISTRICT OFFICES 24
APPENDIX - COUNTY CODES 25
TAX CREDIT CODES 26

# GENERAL INFORMATION AND INSTRUCTIONS

Important tips to help expedite processing of your return:

 Use black ink when preparing the return.

 To indicate a loss (negative income), use brackets around the dollar amount.

 Attach a copy of the federal return behind the state return including returns filed electronically. Combined filers must attach the consolidated Federal Form 1120 (pages 1- 5),
Schedule M-3 and a complete Pro-Forma Federal Return.

 Additional schedules and attachments should be stapled to the return.

Visit our website at www.dor.ms.gov to download forms by tax year and tax type.

TAXPAYER ACCESS POINT (TAP)

Remember, TAP is:

• Easy to use
• Convenient
• Free

Go Paperless!
With TAP, you have the option to Go Paperless. This means that you can pay your taxes online and receive certain correspondence electronically.

TAP email lets you know that you have new correspondence to view online. You then logon to TAP to read the letter or message and take appropriate action on your account. Only you or persons you authorize can see your correspondence.

When making payments or updating profile information, you should always log directly into TAP using your User ID and password. TAP does not provide links containing your transaction or personal information to any external website.

Remember, you can pay your bill online through TAP without registering for a TAP account. For more information on TAP, view the Electronic Filing Section of this booklet.

House Bill 961 - Effective July 1, 2025
This bill reenacted Miss. Code Ann. §27-7-22.7 that provides an income tax credit for taxpayers that use port facilities at state, county and municipal ports for the export of cargo and extends the repeal date to 7/1/2028. It also reenacts code that provides an income tax credit for certain taxpayers that use the airport facilities at public airports for certain charges paid by the taxpayer on the export or import of cargo and extends the repeal date to
7/1/2028.

House Bill 972 - Effective July 1, 2025
This bill amends Miss. Code Ann. §27-7-22.40 to extend the repeal date to 1/1/2029, for the income job tax credit for an enterprise primarily engaged in providing inland water transportation of cargo on lakes, rivers, and intracoastal waterways for each full-time employee of the enterprise in a
MS full-time position.

House Bill 1201 - Effective January 1, 2025
The bill requires the DOR to work in conjunction with the
Secretary of State's office (SOS) to establish a program to provide tax incentives for taxpayers who develop blighted property in MS for the purpose of placing the property into use either as an owner-occupied dwelling or commercial building.

House Bill 1644 - Effective January 1, 2025
The bill amends Miss. Code Ann. §57-87-5 to revise the definition of "equipment used in the deployment of broadband technologies" for purposes of the income tax credit and corporation franchise tax credit available to telecommunications enterprises for investments made in such equipment before 7/1/2030, and for purposes of the ad valorem tax exemption for such equipment placed in service.

Senate Bill 2858 (2016 Legislative Session) - Miss. Code
Ann. §27-13-1, §27-13-5, §27-13-7 and §27-13-67
Beginning with tax year 2018, the franchise tax will be completely phased out over a nine-year period ending with tax year 2027 as follows:

S Corporation
Every S corporation domesticated or qualified to do business in
Mississippi, and every S corporation engaged in business in
Mississippi or having sources of income from Mississippi must file a return even if the corporation is inactive or not otherwise engaged in business. Such corporation will remain subject to the filing requirements until the corporation is officially dissolved or withdrawn through the Office of the Mississippi Secretary of State.

Foreign S corporations engaged in business in Mississippi or having sources of income in this state although not qualified to transact business in this state through the Office of the Secretary of State are subject to the measure of the franchise tax levy.

Partnership
Every partnership, LLC, or LLP, domestic or foreign, deriving income from property owned within the State of Mississippi or business, trade, profession or occupation carried on within the state must file a return.

Exempt Organization
Every exempt corporate organization as described in Miss. Code
Ann. §27- 7-27 or §27- 7-29 and not otherwise exempt from the
Tax Year 2020 $2.00 per $1,000 of capital in excess of $100,000
Tax Year 2021 $1.75 per $1,000 of capital in excess of $100,000
Tax Year 2022 $1.50 per $1,000 of capital in excess of $100,000
Tax Year 2023 $1.25 per $1,000 of capital in excess of $100,000
Tax Year 2024 $1.00 per $1,000 of capital in excess of $100,000
Tax Year 2025 $0.75 per $1,000 of capital in excess of $100,000
Tax Year 2026 $0.50 per $1,000 of capital in excess of $100,000
Tax Year 2027 $0.25 per $1,000 of capital in excess of $100,000
Tax Year 2028 Franchise tax repealed effective January 1, 2028

# NEW LEGISLATION WHO MUST FILE

income tax levy is required to make a corporate tax filing if they have Mississippi unrelated business taxable income. Refer to the "Unrelated Business Taxable Income of Exempt
Organizations" section of this booklet for more information.

S Corporation
"S corporation" means a corporation for which a valid election under section 1372(a) of the Internal Revenue Code is in effect.
A corporation must file Form 84-105 if (a) it elected to be an S corporation by filing Federal Form 2553, (b) the IRS accepted the election, and (c) the election remains in effect. Do not file
Form 84-105 until the corporation has been notified by the IRS that the federal election has been accepted.
An S corporation is not subject to income tax imposed by Miss.
Code Ann. §27- 7-5 but may be subject to withholding requirements as explained under the "Tax Payments" section of this booklet. Also, every S corporation domesticated or qualified to do business in Mississippi is subject to the measure of the franchise tax levy.

Partnership
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 a corporation, trust or estate.

A domestic or foreign limited liability company (LLC) is classified as an entity for purposes of Mississippi income tax laws in the same manner as the entity is classified for federal income tax purposes. If an LLC is treated as a partnership for federal i ncome tax purposes, it will file as a partnership for
Mississippi purposes. If an LLC is treated as a corporation for federal income tax purposes, it will file as a corporation for
Mississippi income and franchise tax purposes.

In this booklet, all three entities (partnership, LLC, and LLP) may, at times, be referred to as "partnerships" and partners/members referred to as "partners".

Once the election is made to be treated as an S corporation, it stays in effect until it is terminated. Mississippi considers the election to be terminated at such time as the election is considered terminated for federal purposes.

S Corporation
The Mississippi Pass-Through Entity Tax Return must be filed on or before the 15th day of the 3rd month following the close of the accounting year. If the due date falls on a Saturday,
Sunday or legal holiday, the return is due the next business day. A business day is any day that is not a Saturday, Sunday or legal holiday.

If the S election was terminated during the tax year, the due date of Form 84- 105 is on or before the 15th day of the 3rd month following the date of termination.

Partnership
Calendar year partnerships, LLCs and LLPs must file no later than
March 15th annually. Fiscal year partnerships, LLCs and LLPs must file no later than the 15th day of the 3rd month following the end of the fiscal year.

Extension of Time to File Return
Mississippi will follow federal return filing and extended due dates.
Taxpayers requesting an extension of time to file the return must remit the tax due with Form 83-180, on or before the due date of the return. The authorized extension of time to file does not extend the time for payment of the income or franchise tax due. Interest and penalty will apply on any underpayment of tax.

The return should be mailed to:

Department of Revenue Street Address:
P.O. Box 23191 500 Clinton Center Drive
Jackson, MS 39225-3191 Clinton, MS 39056

Pursuant to the authority granted to the Department of Revenue in Miss Code Ann Section 27-3-83 and Title 35, Part I, Chapter 4 of the Mississippi Administrative Procedures and Procedures
Code, the Department of Revenue will mandate all Corporations,
S corporations, and Partnerships with assets of $250,000 or more and/or have returns with 100 or more K-1s to file electronically for tax years beginning on or after January 1, 2019 and all subsequent tax years.

Failure to file returns electronically may subject taxpayers to a penalty of twenty -five dollars ($25.00) for the first instance of noncompliance and five hundred dollars ($500.00) for each additional instance of noncompliance.

Please contact the Department of Revenue at (601) 972-7700 if you are unable to comply with this mandate.

TAP provides online access to your tax account information
24 hours a day, 7 days a week. TAP is free and convenient!

Users of TAP are able to:

• make electronic payments of returns and assessments;
• view previously filed returns and amended returns;
• make address changes and view tax correspondence;
• view recent account activity, and;
• register a new business or add accounts to the business;

Third Party Access for Tax Practitioners
Tax practitioners can have TAP access to account information for each of your clients - from one login. First, create your own TAP account (only one per FEIN). Once you are registered in TAP, select "Add Access to Existing Account." Your client (taxpayer) must provide you the Letter ID and Account ID in order for you to have access to their accounts. All accounts you set up for third party access are found under the "Other Taxpayers' Accounts" tab in TAP. For more information on TAP, visit our website at www.dor.ms.gov.

TAXPAYER ACCESS POINT (TAP)

# TIME AND PLACE FOR FILING

Users cannot file Pass -Through Entity Tax Returns in TAP.
However, tax preparers have the ability to file the tax returns electronically through an authorized software provider. A copy of the complete federal return must be submitted electronically.
Please visit our website at www.dor.ms.gov for additional information on how to file Mississippi returns on-line and how to access approved on-line software providers.

S Corporation
The return must be signed by the president, vice president or other officer of the corporation. A receiver, trustee or assignee must sign any return which he/she is required to file on behalf of a corporation.

Partnership
The return must be signed by one general partner or limited liability company member. If a receiver, trustee in bankruptcy, or assignee controls the organization's property or business, that person must sign the return.

Anyone who prepares the return but does not charge the company should not complete the paid preparer section.
Generally, anyone who is paid to prepare the return must legibly sign it and must also furnish the preparer tax identification number (PTIN) issued by the Internal Revenue
Service (IRS).

To be a complete return, the return should contain all the requisite general information, as well as all summary tax information and the basic back up schedules. Examples of the required general information are complete name, current address, FEIN, officer information and signature and other information relating to the filing entity as requested on page 2 of Form 84-105.

Examples of the summary tax information are the front page of the return, the franchise tax schedule, the computation of net income, the computation of the apportionment factor (if applicable), the balance sheet, nonbusiness income schedule
(if applicable), the direct accounting income statement (if applicable), schedules showing the computation of any tax credit taken (such as jobs credit) and the Schedule K reflecting information pertaining to shareholders' distributive shares of income and deductions.

Examples of the basic backup schedules are details of other additions or other deductions as requested on the computation of net income schedule, details of other additions or other deductions as requested on other statements made a part of the return, details of other current assets and other assets, and details of other current liabilities and other liabilities on the balance sheet as are normally included with the federal return.

The total tax due on the return must be paid in full no later than the 15 th day of the 3rd month after the end of the tax year (S
Corporation and Partnership).

Payment Options:

• Online Payments: To pay online, go to www.dor.ms.gov, click on Taxpayer Access Point (TAP) and follow the instructions. Without a MARS account or a TAP login, users are able to make estimate payments online.
• Check or Money Order Payments: To pay by check or money order, complete the payment voucher (Form 84-300), make the check or money order payable to the Department of Revenue and mail both to P.O. Box 23192 Jackson, MS

39225-3192.
Pass-Through Entities may not pay tax on its income but may choose to "pass through" any profits (losses) to its shareholders/partners (owners ). Owners must include pass through items on their income tax returns. Individual owners are subject to tax upon their distributive share of pass-through entity net income, whether it is distributed to them or not. A non-resident individual, who is a member of a pass -through entity owning property or doing business in the State of Mississippi, is subject to tax on his share of the pass-through entity net income, whether distributed or not.
If the pass-through entity does business both within and without the state, it will be necessary to compute the income (loss) of the pass-through entity from sources within the state in order to determine the amount of income taxable to, or the amount of t he loss deductible by, the non-resident owners.
The non-resident shareholder/partner is subject to tax only on such share of his income, whether or not distributed, as is assignable to Mississippi.

S Corporation
An S corporation may elect to file a composite or electing pass - through entity return and make payments of tax on behalf of its non-resident and/or resident shareholders. For more information on filing composite, see the "Composite Filing" section of this booklet. If a non -resident is going to file a Mississippi non - resident individual tax return, he or she must not be included in a composite return but should separately pay estimated taxes as an individual using Form 80-106. For more information on filing as an electing pass -through entity, see the
"Electing Pass-Through Entity" section of this booklet.

Non-Resident S Corporation Income Tax Agreement
All non-resident shareholders of Mississippi S corporations are required to execute an agreement (a) to file a return and to make timely payment of all taxes imposed on the shareholder by the state of Mississippi with respect to the income of the S corporation, and (b) to be subject to personal jurisdiction in this state for purposes of the collection of income taxes, together with related interest and penalties, imposed on the shareholder by this state with respect to the income of the S corporation. Form 84-
380 should be filed with the S corporation and maintained by the
S corporation as a part of its permanent tax files. This form should not be sent with the Pass-Through Entity Tax Return.

In the event the S corporation fails to obtain the agreement of a non-resident shareholder indicated above or in the event a nonresident shareholder fails to file a return and make timely payments of all taxes imposed on the shareholder by this state, the S corporation shall make a payment to the state in an amount equal to the highest marginal tax rate in effect under

Miss. Code Ann. §27-7-5 (5%) multiplied by the shareholder's pro rata share of the income attributable to the state reflected on the corporation's return for the taxable period.

Partnership
In the event the individual partners fail to report and pay the taxes imposed according to Miss. Code Ann. §27-7 -25, the partnership and the general partners shall be jointly and severally liable for said tax liability and shall be assessed accordingly. However, the partnership and/or general partners shall not be liable if the partnership withholds 5% of the net gain or profit of the partnership for the tax year and remits the same to the Commissioner.

In a sale of real property and associated tangible personal property which is not considered an exchange or trade of such property, and which results in gross proceed s greater than
$100,000.00 paid by the buyer to the seller and owned by a nonresident, the seller, rather than the buyer, shall be responsible for paying over to the Department of Revenue an amount equal to 5% of the amount realized by the seller.

Partnerships electing to report tax on partnership net income in this manner should submit Form 84-387. Partners with tax remitted to the Department of Revenue through partnership withholding should claim the amount as estimated tax on his or her individual income tax return. Form 84-387 should be provided to the partner by the partnership showing the correct amount withheld.

A partnership that has income from sources within and without
Mississippi should withhold from Mississippi source income only. A partnership can file a composite return or an electing pass-through entity return. See the "Composite Filing" section of this booklet for additional information on composite returns .
See the "Electing Pass-Through Entity" section of this booklet for additional information on electing pass-through entities.

Every taxpayer, filing a composite return or electing pass - through entity return, with an annual income tax liability in excess of $200 must make estimated tax payments. At least
90% of the current income tax liability of the entity filing a composite or electing pass-through entity return must be paid by submitting quarterly payments. The remaining balance is due by the due date of the return.

The due dates for estimated tax payments are:

• 15 th day of the 4th month after year end;
• 15th day of the 6th month after year end;
• 15th day of the 9th month after year end, and;
• 15th day of the 12th month after year end.

The payment is due on the next business day if the date falls on a Saturday, Sunday or legal holiday. Penalties may apply if the corporation does not make the required estimated tax payments by the due date. Use Form 83-305 to determine the amount of interest and penalty on underestimate. See the specific instructions for Form 83-305 in this booklet for more information.

• Late Payment: Interest and penalty are charged on taxes paid late even if an extension of time to file is granted. The interest is assessed from the due date until paid and is computed at 1/2 of 1% per month.

The penalty imposed for failure to pay the tax when due is
1/2% per month not to exceed 25% in the aggregate.

• Late or Non-Filer: Penalties are imposed for failure to file a return when due on the total amount of the tax deficiency or delinquency. The penalty is 5% per month not to exceed 25% in the aggregate. The penalty shall not be less than $100 for income tax for failure to file a return.
• Incomplete Returns: A company that does not file a complete return or does not file a return within the prescribed time may be subject to a penalty of $25 per required attachment or schedule up to a maximum o f $500 per return.

The purpose of this penalty provision is to ensure that sufficient information is disclosed on the return. If major schedules (such as the balance sheet) are omitted or incomplete, or if schedules are consistently omitted or incomplete, then the penalty will be imposed. The more severe or consistent the omission, the more likely it is that the penalty will be imposed. Refer to the "Required
Forms and Schedules" section of this booklet for additional information on what constitutes a complete return.

Direct or Separate Accounting Method: Producers of mineral or natural resource products and construction contractors are required to use direct accounting in computing their taxable income to this state. For more details, see Title 35, Part III,
Subpart 08, Chapter 06 of the Miss Administrative Code. Other taxpayers may not employ a direct accounting or separate accounting method unless they have obtained written authority from the Commissioner to do so. Refer to the Producers of Mineral or Natural Resource Products Section of this booklet for additional information.

Returns should be filed on the basis of the 12-month accounting period established by the corporation. A corporation on a fiscal year basis must enter the beginning and ending dates of the taxable year in the appropriate spaces on the return. No accounting period, other than the calendar year, will be recognized unless before its close, it was definitely established as an accounting period by the taxpayer and the books of such taxpayer were kept in accordance therewith.

All dollar amounts should be rounded to the nearest whole dollar
(no pennies ). Round down to the next lower dollar amounts under $.50 and round up to the next higher dollar amounts of
$.50 and over. For example: $2.15 becomes $2.00; $4.75 becomes $5.00; and $3.50 becomes $4.00.

# ROUND TO THE NEAREST DOLLAR

Taxpayers are required to maintain an accurate and complete set of records and other information necessary for the Department to determine the correct amount of tax due.
The records and other information must be available for inspection by the Department upon request at a reasonable time and location. Refusal or delay by the taxpayer to provide documentation upon the Department's request will result in an assessment being made from any information available, which shall be prima facie correct.

Franchise Tax (S Corporation): $0.75 per $1,000 of capital, or fractional part thereof, of capital, surplus, undivided profits, and true reserves employed in Mississippi in excess of $100,000
(minimum tax of $25).
Income Tax (Composite and Electing Pass-Through Entity):
0% on the first $5,000 of taxable income, 4% on the next $5,000 of taxable income and 5% on all taxable income in excess of
$10,000.

File an amended return to:

• make adjustments to tax;
• claim a refund due to an adjustment to tax;
• claim a net operating loss (NOL) carryback deduction;
• report federal adjustments (amended federal return), and;
• report IRS audit adjustments (RAR).

When to File: A taxpayer may apply to the Department for revision of any return filed at any time within three (3) years of the due date; or, if an extension was granted, three ( 3) years from the date the return was filed. The 3-year period is not applicable to an IRS audit; however, no additional assessment or refund will be made more than three (3) years after the date the
IRS disposes of the tax liability in question.

Net Operating Loss (NOL): Form 84-155 must be filed with an amended return in order to claim a net operating loss deduction.
Form 84 -155 is used to make an irrevocable election to carryback or carryforward the current year NOL. For more information concerning net operating losses, see the "Net
Operating Loss (NOL)" section of this booklet.

Internal Revenue Service Audit (RAR): To document adjustments made as a result of an IRS audit, the Revenue
Agent Report should be attached to the Mississippi amended return.

Amended Federal: To document adjustments made as a result of an amended federal return, a copy of the amended federal return should be attached to the amended Mississippi return.

Any other documentation supporting the adjustments made should also be included with the amended Mississippi return. Attach a copy of the original filed return. Overpayments that are not refunded will be applied to the next period for which the corporation makes a filing.

Treatment of A QSSS and Its Owner: A federal election to be treated as a Qualified Subchapter S Subsidiary (QSSS) is considered an election for state purposes and as such the QSSS will be treated the same for state income and franchise tax purposes. Thus, the QSSS's activity is treated as a division of its parent S corporation for federal income tax purposes and will be treated in the same manner for state income and franchise tax purposes.

A parent S corporation that is required to file and report for federal income tax purposes on the activity conducted in
Mississippi by its QSSS is considered doing business in
Mississippi for both income and franchise tax purposes and shall include the activity of the QSSS when making income and franchise tax return filings to this state. The QSSS will not make separate return filings. Attach a copy of the approved federal QSSS election when filing the parent S corporation return.

S corporations that do not have a QSSS election in effect will make return filings in the same manner as any other S corporation. An S corporation is subject to the franchise tax and must compute its Mississippi income. Unless a composite return election is in effect, each shareholder will make a separate filing to this state reporting its Mississippi taxable income and, if a corporation, will make at least the minimum franchise tax payment.

Treatment of a SMLLC and Its Owner: A Single Member
Limited Liability Company (SMLLC) that is disregarded for federal reporting purposes will, likewise, be disregarded for state reporting purposes.

The SMLLC's activity in this state will be reported by the owner of the SMLLC when making its return filings. A corporate owner of an SMLLC will make income and franchise tax return filings based on its activities and the activities of any disregarded entities. If the owner of the SMLLC is itself an SMLLC or other type of disregarded entity, then such amounts will be reported by the ultimate owners which are not disregarded entities.

FRANCHISE TAX (S CORPORATIONS)

The franchise tax is measured by the value of capital used, invested or employed in the exercise of any power, privilege or right enjoyed by the corporation within Mississippi. The mode of measurement is the amount of capital of the corporation employed or so situated as to be privileged to be employed in this state. In determining the amount of capital, the net book value as regularly employed in conducting the affairs of the corporation should be accepted as prima facie correct as to the true capital of the corporation, except where the Commissioner determines that the book value does not properly reflect capital employed in this state, and in that situation , the Commissioner's determination of capital should be prima facie correct.

Form 84-110 must be completed by all corporations to indicate the amount of capital of the corporation. All reserves that do not represent definitely known and fixed liabilities must be considered as elements of capital of the 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, subject to withdrawal on demand. Sums representing debts, notes, bonds, mortgages due and payable, depreciation reserves, bad debt reserves, or reserves representing valuation accounts may be excluded (unless between affiliated companies or shareholders).

Holding Corporation: A holding corporation, as defined in Miss.
Ann. Code §27-13 -1(i), is (1) any corporation owning at least eighty percent (80%) of the value of capital stock and at least eighty percent (80%) of the combined voting power of all classes of capital stock of another corporation and (2) deriving at least ninety-five percent (95%) of its gross receipts from dividends, interest, royalties, rents, services provided to members of an affiliated group (as defined in Section 27-7- 37(2)(d)) to the extent of the cost of providing such services.
Per Miss. Ann. Code §27-13 -1(i), in the case of a holding corporation, the value of the capital used, invested or employed in this state shall exclude that portion of the book value of the holding corporation's investment in stock or securities of its subsidiary co rporation using the ratio between (1) the holding corporation's investment in stock or securities of its subsidiary corporation and (2) the holding corporation's total assets. Such ratio shall then be applied to the total capital stock, surplus, undivided profits, and true reserves of the holding corporation in order to arrive at the amount of the exclusion. The holding company exclusion is computed on line 7 of Form 84- 110 and a schedule of computation must be attached to the return for the exclusion.
Multistate Taxpayers: Lines 9 through 12 of Form 84-110 must be completed by multistate corporations doing business both within and without Mississippi. Total capital of a multistate corporation is apportioned to Mississippi in the ratio that real and tangible personal property owned in Mississippi and gross receipts from business carried on in Mississippi bears to the total real and tangible personal property owned by the corporation and gross receipts wherever located and from wherever received.

The amount of capital apportioned to Mississippi is computed on line 13 of Form 84-110. The section of Form 84-110 concerning the assessed value of all real and personal property in
Mississippi must be completed by all corporations. Miss. Code
Ann. §27-13 -9 and §27- 13-13, provide that the amount of the determined capital in Mississippi should in no case be less than the assessed value of the Mississippi property of the corporation for the year preceding the year in which the return is due.
Taxable capital is calculated on lines 15 through 18 of Form 84-

1. The amount of taxable capital shown on line 18 should be entered on line 1, Form 84-105.

For tax years ending on or after December 31, 2001, the property and receipts of flow -through entities must be included in a multistate corporate partner's computation of the apportionment ratio applied to the capital base. The assessed value of property of flow -through entities must be included in a multistate corporate partner's assessed value of property when determining the alternate capital base.

# INCOME TAX

Generally, all domestic and foreign pass-through entities having income from sources within Mississippi must complete Form 84-
122, which makes adjustments for additions to and deductions from federal ordinary income due to differences in federal and
Mississippi laws, to arrive at net income (loss) for state purposes.

Mississippi does not follow federal rules concerning installment sales. Gains from the sale of casual property will be recognized in the year of the sale. However, the tax on the gain may be deferred. Deferred taxes are generally paid as the proceeds from the sale are received. However, the following will result in acceleration of payments:

• Transfer, disposition, sale or disposal of the note in any manner will result in deferred tax payments becoming immediately due and payable.
• Liquidation, dissolution, withdrawal from this state and certain merger transactions will result in deferred tax payments becoming immediately due and payable.
• Failure to comply with the necessary filing requirements.

Taxpayers who elect the installment method for federal income tax purposes should include as a part of their return both a
Federal Form 6252 and a schedule of any differences between the federal and Mississippi amounts.

Taxpayers are required to add back the following to its computation of net income:

• Intangible expenses and costs and interest expenses and costs in relation to or in connection with the direct or indirect maintenance or management, ownership, sale, exchange, or other disposition of intangible property.
• Royalty, patent, technical and copyright fees, licensing fees and other similar expenses.
• Expenses and costs associated directly or indirectly with factoring transactions or discounting transactions.

Intangible property includes patents, patent applications, trade names, trademarks, service marks and similar types of intangible assets.

Limitations: The adjustment will not apply to such portion of intangible expenses, interest expenses and costs which are not with a related member; or the related member is not primarily engaged in the acquisition, use, maintenance, management, ownership, sale, exchange or other disposition of intangible property; and the transaction(s) were done for a valid business purpose.

The state definition of "arms -length" is not tied to that of the federal definition. See Miss. Code Ann. § 27-7 -9(j)(6). The
Commissioner can adjust a transaction when income has been shifted between related parties and/or taxes have been avoided in this state.

Gains from the sale of certain stocks in domestic entities are not recognized as a part of income. However, the gain must be reduced by losses from the sale of certain stocks in domestic entities if the losses were incurred in the year of the gain or within the two years preceding or subsequent to the gain. See
Miss. Code Ann. § 27-7-9(f)(10).

Mississippi has not adopted federal provisions related to
Extraterritorial Income Exclusion. The amount related to this exclusion of income on the federal return must be added back to the Mississippi income tax return prior to the apportionment of income. The proper placement for this Mississippi adjustment to federal income is on Form 84-122, line 9 titled
"Other Additions Required by Law". A copy of Federal Form
8873 should be attached to the Mississippi return when this adjustment is being made for federal purposes.
In addition, a FSC (Foreign Sales Corporation) that is organized under the laws of a U.S. territory is treated as a domestic corporation and, thus, dividends received from it are considered apportionable business income.

Total Assignment of Income: If the business activity in respect to any trade or business of the pass -through entity occurs within this state, and if by reason of such business activity the pass-through entity is not taxable in another state, the total net income (loss) of the pass -through is assigned to
Mississippi.
Apportionment of Business 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 is taxable in another state, the portion of the net income (loss) arising from such trade or business which is derived from sources within this state, should be determined by apportionment in accordance with the formulas prescribed by Title 35, Part III, Subpart 08, Chapter 06 of the Miss. Admin.
Code unless prescribed otherwise. In such case, the taxpayer must complete Form 84-125. Multistate contractors use Form
84-124.

Allocation of Nonbusiness Income: Non -business income
(loss) shall be allocated by multistate corporations within and without this state in accordance with the provisions of Title 35,
Part III, Subpart 08, Chapter 06 of the Miss. Admin. Code. Form
84-150 should be used only if the corporation has activities in another state and has income, losses, expenses, or deductions which are to be allocated ("non-business") rather than apportioned. For a definition of what constitutes "non-business" income, losses, expenses, and deductions and rules for allocating these items, See Miss. Code Ann. §27-7-23.

Net Operating Loss: For any taxable year ending after
December 31, 2001, the period for net operating loss carrybacks and net operating loss carryovers is two periods back and twenty periods forward. This is NOT in accordance with federal carryback and carryover provisions that provide for a five-year carryback period.

A short taxable year counts as a taxable year. A taxpayer may elect to forgo the carryback on Form 84-155. Once this election is made, it cannot be changed.

Form 84-155 must be completed and attached or an NOL deduction will not be allowed. Taxpayers must indicate the income year the NOL was applied (Column C of Form 84-155).

Taxpayers engaged in the trade or business of producing oil, gas, other liquid hydrocarbons, sulfur, coal, sand, gravel and other mineral or natural resource products, except timber, should 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" 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.
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 should 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.

For tax years beginning on or after January 1, 2002, every exempt organization, as described in Miss. Code Ann. § 27- 7-
27 or § 27-7 -29 and not exempt from the income tax levy
(federal & state agencies, etc.), is required to file an income tax return with this state if the organization:

1. Earns or receives unrelated business taxable income as determined under IRC Section 512 or is an ESOP with an interest in an "S" corporation, and
2. Is a resident of this state, doing business in this state, or receiving income from sources within this state.

Exempt corporate organizations file Form 84- 105 and any necessary supplemental schedules. These organizations are not subject to the franchise tax levy and should leave lines 1 through 4 blank.

In computing taxable income, enter on line 1 of Form 84-122
(line 1, page 2 of Form 81- 110 for trust organizations) the amount of unrelated business taxable income before any net operating loss and specific deduction as reported on Federal
Form 990-T. A complete and signed copy of Federal Form 990-
T must be attached to the Mississippi schedules as a part of the return. Make any necessary adjustments for income/expenses otherwise included/excluded under the income tax laws of this state such as income from sources without this state, add-back of nondeductible income taxes, etc.

Corporate organizations with unrelated business taxable income are subject to the same estimated payment requirements as other corporate taxpayers. Corporate organizations must make all required tax payments by the 15th day of the fourth month following the close of the tax year.

While the filing deadline is also the 15th day of the fourth month following the close of the tax year, an automatic filing extension is granted. If a taxpayer files an extension for federal tax purposes, the Mississippi filing deadline will be extended through the date of the federal extension as well.

Employee Stock Ownership Plans that receive Mississippi income as a shareholder in an "S" corporation must include such income as a part of Mississippi taxable income. The source of the income is determined by the "S" corporation's activities and is report ed on Form 84-132 to the ESOP shareholder.

Trust organizations must make all required tax payments by the 15th day of the fourth month following the close of the tax year. Generally, if a filing extension is granted for federal tax purposes, it will be granted for state purposes as well. A copy of the federally approved extension must be attached with the return filing.

PRODUCERS OF MINERAL OR NATURAL
RESOURCE PRODUCTS

# INCENTIVE CREDITS AND EXEMPTIONS

Incentive credits arising at the S corporation, partnership, LLC or LLP level are passed through to the shareholders, partners/interest owners based on their percentage of ownership in the entity earning the credit.
As a general rule, the credit passed through to the shareholder, partner/interest owner can be applied only to the income tax attributable to the shareholder's, partner/interest owner's income derived from the entity earning the credit.

In the case of a Mississippi resident who is a partner in a multistate S corporation or partnership, credits passed through from the S corporation or partnership may be used to offset only the amount of income tax attributable to the owner's share of pass-through entity income assigned to Mississippi. For any of these credits to be allowed, schedules must be attached showing the computations.

Form 84-401 must be filed by the S corporation or partnership to claim the credits earned before they are passed through to shareholders. If more than three income tax credits are claimed, attach a supplemental schedule, and enter the total on line 3 of
Form 84-401. Non- composite members of a composite return and all members of an electing pass-through entity return should complete Form 80-401 and attach as a part of their Mississippi
Individual Income Tax Return.

The following is a brief description of the major credits allowed under state statutes:

Premium Retaliatory Tax Credit (02)
An income tax credit is available to insurance companies that paid additional retaliatory premium taxes to other states. The credit can offset 100% of income tax due. No carryover is allowed for this credit.

Finance Company Privilege Credit (03)
An income tax credit is provided to finance companies that paid privilege taxes. The credit can offset 100% of income tax due.
No carryover is allowed for this credit.

Jobs Tax Credit (05)
A credit is allowed for increasing employment levels in certain types of business. The business must be primarily engaged in manufacturing, processing, warehousing, distribution, wholesaling, or research and development; or designated by rule and regulation by the Mississippi Development Authority 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, telecommunications enterprises, data or information processing enterprises or computer software development enterprises or any technology intensive facility or enterprises.

The amount of the credit is based on the number of new jobs created and the county where the jobs are created. The credit is good for a period of five (5) years. This credit may be used in combination with any of the other credits. However, the total of the Jobs Tax Credit is limited to 50% of the income tax liability attributable to the income derived from operations in this state for that year. Any credit claimed but not used in a taxable year may be carried forward for five (5) years.

The credit is based on the percentage of payroll for new full - time jobs.:

County Ranking
Average
Minimum
Increase of Jobs
Percentage of Payroll
Tier One
(Developed) 20 or More 2.5%
Tier Two
(Moderately Developed) 15 or More 5%
Tier Three
(Less Developed) 10 or More 10%

The number of jobs must be created within 1 year and is measured at the end of the fiscal year. They cannot be accumulated over several years. The credit is available for each net new full -time job created as long as the minimum number has been achieved and maintained. The credit is for full-time positions only and is based on the current year gross payroll. The credit allowed shall be adjusted in the event of payroll fluctuations during the additional five (5) years of the credit. You cannot combine part -time jobs 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. Form 83-450 must be completed and attached to the return. Please attach to this for m, a schedule listing the new full-time jobs created (titles/pins, date created and payroll amount for the year).
A jobs tax credit is authorized for each full -time employee employed in a new cut and sew job by enterprises that own or operate an upholstered household furniture manufacturing facility. The repeal date on this provision is extended to January
1, 2026.
A jobs tax credit is authorized for each full -time employee of businesses primarily engaged in providing inland water transportation of cargo on lakes, rivers and intracoastal waterways. This credit is effective from and after January 1,
2019.

National or Regional Headquarters Tax Credit (06)
(Repealed effective July 1, 2022)
An income tax credit is available for a 5 -year period for each position assigned to the national or regional headquarters of a business created in or transferred to Mississippi. The credit is
$500 for each new full -time employee, $1,000 for each new fulltime employee whose salary is 125% of the average annual state wage, or $2,000 for each new full -time employee whose salary is 200% of the average state wage. A minimum number of twenty ( 20) new headquarters jobs must be created to receive the credit. A taxpayer claiming a refund on this credit must file a separate return; it cannot be included in a combined return.

Research and Development Skills Credit (07)
This credit provides an incentive to locate full -time positions requiring research and development skills in the state. These positions have to be engaged in a research and development activity. 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 4-year college or university, employment in the employee's area of expertise and compensation at a professional level with two ( 2) years of related job experience.
Examples are chemist and engineers.
A credit of $1,000 for each full -time position requiring research and/or development skills is available for a 5-year period. There is no minimum number of positions that must be created to qualify for this credit. The credit is for full -time positions only. Part -time jobs cannot 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 for employees employed for less than 12 months will be allowed based on a pro-rated portion 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 12.

The total of the Research and Development Skills Credit is limited to 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.

Employer Child/Dependent Care Credit (08)
The Child/Dependent Care Tax Credit is an incentive to any business providing dependent day care (both children and adult) for its employees during the employee's working hours or assisting community -provided day care. The expenses must be incurred in the operation of a program certified by the Mississippi
Department of Health. 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 maintenan ce 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 expenses are net of any reimbursement.
The Employer Child/Dependent Care Tax Credit may be used in combination with any other credit. The credit is equal to 50% of the qualified day care expenses. It is not refundable. It can be used to offset 100% of the income tax liability. 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. Any excess credit after five (5) years is nonrefundable and shall not be carried forward.

Reforestation Tax Credit (RTC) (10)
This credit, based on the costs incurred for certain approved reforestation practices, is an amount equal to the lesser of 50% of the actual cost of approved practices or 50% of the average cost of approved practices as established by the Mississippi Fores try
Commission. In any taxable year, the maximum amount of RTC shall not exceed the lesser of $10,000 or the amount of income tax imposed upon the eligible owner for the taxable year reduced by the sum of all other credits allowable to the eligible owner.

Effective January 1, 2007, the lifetime maximum RTC that an eligible owner may utilize is $75,000.00 in the aggregate. Any unused portion of the RTC may be carried forward to succeeding years. Reforested acreage on which the eligible owner receives any state or federal cost share assistance funds to defray the cost of an approved reforestation practice is not eligible for the RTC.
The RTC is not available to private corporations which manufacture products or provide public utility services of any type or any subsidiary of such corporations.

Gambling License Fee Credit (11)
An income tax credit provided to the licensee that paid a license fee which is based on gross revenues of the licensee. The credit can offset 100% of income tax due. No carryover is allowed for this credit.

Mississippi Business Finance Corporation Revenue Bond
Service Credit (13)
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. Effective January 1, 2014, Senate
Bill 2376 amends Miss. Code Ann. §57- 10-401 to revise the term
"Economic Development Project" to include the economic development project of a related approved company that is merged into or consolidated with another approved company where the approved companies are engaged in a vertically integrated manufacturing or warehouse operation. The bill also amends Miss.
Code Section Ann. §57-10 -449, to extend the repeal date until
October 1, 2017, the authority for the Mississippi Business Finance
Corporation to issue bonds to finance economic development projects. For more information on the benefits of this program contact: Mississippi Development Authority, P.O. Box 849,
Jackson, MS 39205-0849.

Ad Valorem Inventory Tax Credit (14)
This is an income tax credit for manufacturers, distributors and wholesale or retail merchants for a certain amount of ad valorem taxes paid on commodities, goods, wares, and merchandise held for resale. The ad valorem credit may be claimed for each location where such commodities, products, goods, wares, and merchandise are found and upon which the ad valorem taxes have been paid. An income tax credit for ad valorem is also allowed for taxes paid on rental equipment. Rental equipment is defined as any rental equipment or other rental items which are held for short-term rental to the public under rental agreements that are not subject to privilege taxes. For the 2016 taxable year and each taxable year thereafter, the tax credit of the taxpayer shall be the lesser of the amount of the ad valorem taxes paid or the amount of income taxes due that are attributable to each lo cation. Any ad valorem taxes paid by a taxpayer that is applied toward the tax credit may not be used as a deduction by the taxpayer for state income tax purposes. Any unused tax credit may be carried forward for five (5) consecutive years. Any expenses on which the credit is calculated must be added back to taxable income.
A copy of the tax receipt from the county that shows the inventory valuation, a schedule showing the calculation of the ad valorem tax paid based on the valuation , and proof of

payment must be attached to the return.

Export Port Charges Credit (15)
An income tax credit is authorized for taxpayers that utilize the port facilities at state, county, or municipal ports. The income tax credit is equal to the total export cargo charges paid by the taxpayer for:
(a) receiving in the port; (b) handling to a vessel; and (c) wharfage.
The credit provided should not exceed 50% of the amount of tax imposed upon the taxpayer for the taxable year reduced by the sum of all other credits. Any unused portion of the credit may be carried forward for the succeeding five (5) years.

Import Port Charges Credit (17)
An income tax credit is authorized for taxpayers that utilize the port facilities at state, county, or municipal ports for the import of cargo.
To be eligible, a taxpayer must locate its United States headquarters in Mississippi on or after January 1, 2005, employ at least 5 permanent full -time employees who actually work at such headquarters and have a minimum capital investment of
$5,000,000 in Mississippi. The income tax credit is equal to the charges paid by the taxpayer for: (a) receiving in the port; (b) handling to a vessel; and (c) wharfage. The credit provided shall not exceed 50% of the amount of tax imposed upon the taxpayer for the taxable year reduced by the sum of all other credits. Any unused portion of the credit may be carried forward for the succeeding 5 years. The maximum cumulative credit that may be claimed ranges between $1,000,000 and $4,000,000 depending on the number of permanent full-time employees of the taxpayer.

Broadband Technology Credit (BTC) (19)
A tax credit is provided for telecommunications enterprises making investments in equipment used in the deployment of broadband technologies. The credit applies to both income and franchise taxes. The credit is a percentage of the cost of the investments incurred after June 30, 2003, and before July 1, 2013. The percentage applied is 5%, 10%, and 15% for Tier 1, Tier 2, and Tier
3 counties respectively. For more details on eligibility, computation of the credit, qualifying expenditures, limitations, carryovers, as well as any necessary forms or work sheets, please contact the
Corporate Tax Division at (601) 923-7 700. Enterprises qualifying for this credit are able to receive certain sales tax exemptions as well. For more information please contact the Sales Tax Bureau at
(601) 923-7015.

House Bill 1729 amended Miss. Code Ann. §57-87-5 to extend until
July 1, 2025, the franchise tax credit authorized for telecommunications enterprises for the cost of equipment used in the deployment of broadband technologies and to extend until July
1, 2025 the ad valorem tax exemption for equipment used in the deployment of broadband technologies by telecommunications enterprises.

House Bill 1644 amended Miss. Code Ann. §57-87-5 to revise the definition of "equipment used in the deployment of broadband technologies" for purposes of the income tax credit and corporation franchise tax credit available to telecommunications enterprises for investments made in such equipment before
7/1/2030, and for purposes of the ad valorem tax exemption for such equipment placed in service. Effective January 1, 2025

Manufacturing Investment Tax Credit (23)
A manufacturing enterprise who falls within the definition of the term "manufacturer" in Miss. Code Ann. § 27-65 -11 and has operated in the state for at least two ( 2) years is allowed a manufacturing investment tax credit for income tax equal to 5% of the eligible investments made by the manufacturing enterprise.
"Eligible investment" means an investment of at least $1,000,000.00 in buildings and/or equipment for the manufacturing enterprise.

The maximum credit that may be claimed by a taxpayer on any project shall be limited to $1,000,000. The Manufacturing
Investment Tax Credit should not exceed 50% of the taxpayer's state income tax liability in any one tax year net of all other credits.
Any Manufacturing Investment Tax Credit claimed but not used may be carried forward for five (5) years from the close of the tax year in which the eligible investment was made. For more details on eligibility, computation of the credit, qualifying expenditures, limitations, carryovers, as well as any necessary forms or work sheets, please contact the Corporate Tax Division at (601) 923-
7700.

Historic Structure Rehabilitation Credit (26)
An income tax credit is allowed for certain costs and expenses in rehabilitating eligible property certified as a historic structure or structure in a certified historic district. The taxpayer may elect to receive a 75% rebate on the total amount of excess historic rehabilitation credit in lieu of a ten-year carryforward.

New Markets Credit (28)
The New Markets Credit allows a credit for income, insurance premium, or premium retaliatory taxes to investors in eligible equity securities issued by a Qualified Community Development
Entity that has entered into an allocation agreement with the
Community Development Financial Institutions Fund of the U.S.
Treasury Department (CDFI) with respect to federal income tax credits authorized by the Federal NMTC Law, which includes the
State of Mississippi in the service area outlined in such agreement. This Qualified Community Development Entity is commonly referred to as a "CDE".

The CDE must use 85% or more of the proceeds of the issuance of the equity security to make investments that are Mississippi
Qualified Low -Income Community Investments (MQLICIs), and those investments must be maintained for a minimum of seven (7) years. A MQLICI is an investment in Mississippi in a business that meets the requirements of a Qualified Active Low -Income
Community Business (QALICB) or an investment in Mississippi approved as a Qualified Low Income Community Investment under the Federal New Markets Tax Credit law. A security meeting these requirements is commonly referred to as a "QEI". MDA will review the QEI to determine if it qualifies for the Mississippi New
Markets Credit. If the QEI does qualify, MDA will issue a certification of credits allowed. The total Mississippi New Markets
Credit for all Mississippi taxpayers is capped at $15,000,000 per year.

Wildlife Land Use Credit (30)
Effective January 1, 2010, a state income tax credit is allowed that provides a $5.50 per acre tax credit for certain taxpayers that allow land to be used as a natural area preserve, wildlife refuge, wildlife management area or public outdoor recreation area. Land must first be approved to be suitable for the uses listed above by the
Mississippi Commission on Wildlife, Fisheries and Parks. Any unused credit amount may be carried forward for five (5) years from the close of the taxable year in which the land was approved for such a use.

Headquarters Relocation Credit (32)
Effective January 1, 2014, an income tax credit is authorized under
House Bill 785 for any company that transfers or relocates its national or regional headquarters to Mississippi. The amount of the credit is equal to the actual relocation costs paid by the company in the taxable year.

Relocation costs shall include those non-depreciable expenses that are necessary to relocate headquarters' employees to the national or regional headquarters, including, but not limited to, costs such as 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.

The company must create twenty (20) jobs to qualify, and the credit shall be applied to the taxable year in which the relocation costs are paid. The credit is limited to a $1,000,000 cap each fiscal year.

Veteran Employee Credit (33)
This is an income tax credit for taxpayers that employ persons who are honorably discharged veterans who served on active duty in the
Armed Forces of the United States on or after September 11, 2001, and who have been unemployed for six consecutive months immediately prior to being employed by such taxpayers. Likewise, this bill authorizes any tax credit claimed but not used in any taxable year to be carried forward for five (5) consecutive years and the aggregate amount of tax credits that may be awarded shall not exceed $1,000,000.00. This bill is effective January 1, 2016.

Business Contributions to Eligible Charitable Organizations
Effective from and after January 1, 2019, the Children's Act authorized an income tax credit for business enterprises that donate cash to eligible charitable organizations. The credit is limited to fifty percent (50%) of the total tax liability and may be carried forward for five (5) years.

House Bill 1729 amended Miss. Code Ann. § 27-7-22.41 was to increase the aggregate amount of credits that may be awarded during a calendar year for voluntary cash contributions by business enterprises to eligible charitable organizations and to revise certain provisions relating to the allocation of such credits.

Endowment Fund Charitable Credit (37)
Provides an income tax credit for donations made to endowed funds held by community foundations. The tax credit shall be 25% of the qualified contribution made to the endowed fund with the minimum amount being $1,000 and the maximum amount being $500,000. If the amount of allowable credit exceeds the amount of tax due, the excess may be carried forward for five (5) years. This credit can be utilized by both individual and corporate taxpayers and is effective from and after January 1, 2019.

Pregnancy Resource Charitable Contribution Credit (39)
A credit is available for voluntary cash contributions by certain taxpayers to eligible charitable organizations, which is defined as an organization that is exempt from federal income taxation under Section 501(c)(3) of the Internal Revenue Code and is a pregnancy resource center or crisis pregnancy center eligible to receive funding disbursed by the Choose Life Advisory
Committee. The credit is available to a business enterprise engaged in commercial, industrial, or professional activities and operating a s a corporation, limited liability company, partnership, or sole proprietorship. The credit is limited to 50% of the income tax due. Any unused portion of the credit may be carried forward for five (5) years. This credit is in lieu of the charitable contribution deduction.

Starting with 2024 tax year, this credit is available against ad valorem taxes. The credit is limited to 50% of the total tax liability.
Any unused credit amount for income tax or ad valorem tax may be carried forward for five (5) consecutive taxable years. For more information on how to claim the credit visit

Railroad Infrastructure Tax Credit (40)
A credit is available for certain new, reconstruction and replacement expenditures made by Class II and Class III railroads. The credit is limited to the income tax due. Any unused portion of the credit may be carried forward for five (5) years. The total amount of credits that may be claimed by all taxpayers shall not exceed $8,000,000 during a calendar year. A taxpayer may transfer by written agreement any unused tax credit to an eligible transferee at any time during the year in which the credit is earned and five (5) years follow the year in which the credit is earned.

Blood Donation (41)
A credit is available for an employer of $20 for each verified blood donation made by an employee as part of a blood drive. The credit is limited to the income tax due. No carry forward is allowed for any unused portion.

Transitional Home Charitable Contribution Credit (42)
A credit is available for voluntary cash contributions by certain taxpayers to eligible transitional home organizations. The credit is available to an individual and a business enterprise engaged in commercial, industrial, or professional activities and operating as a corporation, limited liability company, partnership, or sole proprietorship. This credit is in lieu of the charitable contribution deduction and is also available against ad valorem taxes. The credit is limited to 50% of the total tax liability. Any unused credit amount for income tax or ad valorem tax may be carried forward for five (5) consecutive taxable years. For more information on how to claim the credit visit www.dor.ms.gov/charitablecontribution-credits.

Low-Income Health Care Services Charitable Contribution
Credit (43)
A credit is available for voluntary cash contributions by certain taxpayers to eligible charitable organizations that contract with physicians and/or nurse practitioners to provide health care services to low -income residents of Mississippi. The credit is available to an individual and a business enterprise engaged in commercial, industrial, or professional activities and operating as a corporation, limited liability company, partnership, or sole proprietorship. This credit is in lieu of the charitable cont ribution deduction and is also available against ad valorem taxes. The credit is limited to 50% of the total tax liability. Any unused credit amount for income tax or ad valorem tax may be carried forward for five (5) consecutive taxable years. For more information on how to claim the credit visit www.dor.ms.gov/ charitablecontribution-credits.

Food Bank Charitable Contribution Credit (45)
A credit is available for voluntary cash contributions by certain taxpayers to eligible charitable organizations that are purchasing, warehousing, and delivering food directly to food pantries or soup kitchens in more than five (5) Mississippi counties on a monthly basis. The credit is available to a business enterprise engaged in commercial, industrial, or professional activities and operating as a corporation, limited liability company, partnership, or sole proprietorship. This credit is in lieu of the charitable contribution deduction. This credit is available against ad valorem taxes. The credit is limited to 50% of the total tax liability. Any unused credit

amount for income tax or ad valorem tax may be carried forward for five (5) consecutive taxable years. For more information on how to claim the credit visit www.dor.ms.gov/ charitablecontribution-credits.

Blighted Property Rehabilitation Credit (46)
A rebate or credit available to taxpayers who develop blighted property in Mississippi for the purpose of placing the property into use either as an owner -occupied dwelling or commercial building.

The rebate or income tax credit is equal to twenty -five (25%) of the total costs and expenses for the rehabilitation if the cost and expense incurred after January 1, 2026 exceed fifty thousand dollars ($50,000) in the case of an owner -occupied dwelling or exceed one hundred thousand dollars ($100,000) for a commercial structure. The actual expenses incurred rehabilitating the eligible property must be between eighty percent (80%) and one hundred twenty -five percent (125%) of the Mississippi Secretary of State approved estimated expenses.

In lieu of claiming the credit, the taxpayer may elect to claim a rebate in the amount seventy-five (75%) of the amount that would be eligible to claim as a credit. The election may be made at any time after the certification of the rebate. If the taxpayer has utilized a tax credit on an income tax return prior to making an election to claim a rebate, then the available rebate will be reduced by the amount of credit utilized.

The maximum aggregate amount of rebates and credits that may be awarded in any one (1) calendar year is two million dollars
($2,000,000). The aggregate amount of rebates or credits that may be awarded may not exceed ten million dollars
($10,000,000).

Any credit claimed but not used may be carried forward for ten
(10) years.

Bank Share Credit (50)
The Bank Share Credit is a franchise tax credit that equals the amount of all ad valorem taxes paid by banks on personal property and on the assessed value of its intangibles to any county, district or municipality. The credit can offset 100% of franchise tax due. No carryover is allowed for this credit.

Mississippi Flexible Tax Incentive Act (MFLEX) (60)
A credit for business and industry to locate or expand facilities and hire individuals in Mississippi. A business must apply with the Mississippi Development Authority (MDA) to be certified for the MFLEX. After the application has been approved, the

business and any affiliates are issued a MFLEX certification containing the amount of credit they may use to offset income, franchise, withholding, sales, and/or use taxes. The MFLEX tax credit may not be used prior to the issuance of the certification by the MDA.

When filing the state income/franchise tax return claiming the credit, attach:

• a copy of the MDA certification letter; and
• a Mississippi Tax Credit Summary Schedule showing all credits taken and any credit carryforward.

The credit is limited to the income tax liability and can be used for up to a period of ten (10) years from the date of the certification.
General Restrictions on Incentive Credits
The only credits whose usage is dependent on another credit are the Export Port Charges Credit, Import Port Charges Credit, and the Reforestation Tax Credit (RTC). The RTC should be used last.

The total of the Jobs Tax Credit, the Headquarters Credit and the
R & D Skills Credit cannot exceed 50% of the total income tax due.
The other credits are not limited in such a manner and their usage will be independent of one another. When one credit is limited to
50% of the income tax due and another one is also limited to 50%, when combined they may offset 100% of the income tax due.

It will be up to the taxpayer to list which credits are to be used on the tax return. Please keep in mind that a number of the credits do not have carryforward provisions. When a deduction on the
Mississippi tax return also gives rise to a tax credit, the amount of that credit which is being used on the current return must be added back to Mississippi income (loss) after any apportionment of income.

The adding back of the credit to taxable income will increase the tax liability, which may increase the amount of credit that may be taken. When this is the case, continue to increase the amount of credit being used and add back to income until there is a difference of $1,000 or less between the two. Therefore, the credit added back may be, at most, $1,000 less than the credit being used.

An expense cannot be used both as a credit and a deduction. For credits that are based on an expense or percentage of an expense, the amount of credit taken should be added back to
Mississippi taxable income in the year the credit is used.
The credits allowed should not be used by any business enterprise or corporation other than the business enterprise actually qualifying for the credit. As a general rule, all credits generated by the S corporation or partnership are passed through to the shareholders based on their respective ownership percentages.
In the event that a composite return is filed on behalf of some or all of the nonresident shareholders, or in the event that a liability for taxes arises due to the failure to secure an agreement from a resident shareholder, or a nonresident shareholder fails to file a return and to make timely payment of taxes due, any credit which would otherwise be passed through to the shareholder(s) involved may be utilized against the tax liability.

Growth and Prosperity (GAP) Areas Tax Exemption
The Growth and Prosperity (GAP) Areas Tax Exemption was created to encourage businesses to locate facilities and hire individuals in areas that have a certain percentage of the population below the federal poverty level or have an unemployment rate that is 200% of the state's average unemployment rate.

The income and franchise tax exemption is available for a period of ten (10) years for certain businesses locating in a designated
GAP area. The eligible businesses include ones that manufacture, process, assemble, store, warehouse, service, distribute, sell any products or goods including products of agriculture, research and development, and others as determined by MDA which will create at least ten (10) jobs.

Businesses that cannot claim the exemption are retail establishments, gaming businesses or casinos and electrical

generation facilities. An eligible business that constructs a new facility or expands an existing facility located in one of the designated GAP areas can apply to MDA to be exempted from state and local taxes for a period of 10 years or until December
31, 2022, whichever occurs first.

A business that relocates from a county in Mississippi to a GAP area is not eligible for the exemption. When filing the state income and franchise tax return claiming the exemption, attach a schedule showing the calculation of how the exemption was calculated, a copy of the certification from the MDA and the completed application, and the Income and Franchise Tax
Credit Summary (Form 84-401) showing all credits taken.

The GAP Area Exemption is authorized under Miss. Code
Ann. § 27-7-21, § 27-13-5 and § 57-80-1 through § 57-80-11.
For more information on the GAP Areas, please contact:

Mississippi Development Authority
Financial Resources Division - GAP Program
P.O. Box 849
Jackson, MS 39205

# SPECIFIC INSTRUCTIONS TAXPAYER INFORMATION

Please provide all information requested. Enter the county code corresponding to your principal business location (see Appendix for a list of the codes).

Partnerships, LLCs, and LLPs filing an informational return should start on page 2, line 1.

FRANCHISE TAX (S CORPORATIONS ONLY)

Line 1: Enter the amount of taxable capital from Form 84-110, line 18.

Line 2: Enter the amount of franchise tax due. For tax year 2025, the franchise tax rate is $0.75 per $1,000 of capital in excess of $100,000 (minimum tax of $25).

Line 3: Enter the total amount of credit claimed from Form 84-401, line 1.
Line 4: Enter the net franchise tax due (line 2 minus line 3). If line
3 equals or exceeds the amount shown on line 2, enter a zero.

# INCOME TAX

(COMPOSITE AND ELECTING PASS-THROUGH ENTITIES)

Line 5: Mississippi net taxable income is only entered on this line if the taxpayer is filing a composite or electing pass - through entity return or is required to make a payment of tax because it failed to obtain an agreement from a nonresident shareholder required by subsection (3) (a) of section 10 of the Mississippi S Corporation Income Tax
Act. In these situations, enter the total of the non-resident shareholders' distributions included in the composite return from Line 32, Form 84-122 or the total of the electing pass-through entity income from Line 35, Form 84-122. If applicable, enter the income on which payment of tax is required by the S Corporation for failure to secure the above-mentioned agreement.

Line 6: Composite or electing pass -through entities, e nter the amount of income tax due. For tax year 2025, the income tax rates are: 0% on the first $5,000 of taxable income; 4% on the next $5,000 of taxable income; and 5% on taxable income in excess of $10,000.

In the case of taxpayers having a fiscal year beginning in a calendar year with a rate in effect that is different than the rate in effect for the next calendar year and ending in the next calendar year, the tax due for that taxable year shall be determined by: (a) Computing for the full fiscal year the amount of tax that would be due under the rates in effect for the calendar year in which the fiscal year begins and,
(b) Computing for the full fiscal year the amount of tax that

would be due under the rates in effect for the calendar year in which the fiscal year ends and, (c) Applying to the tax computed under paragraph (a) the ratio which the number of months falling within the earlier calendar year bears to the total number of months in the fiscal year and, (d) Applying to the tax computed under paragraph (b) the ratio which the number of months falling within the later calendar year bears to the total number of months within the fiscal year and, (e)
Adding to the tax determined under paragraph (c) the tax determined under paragraph (d) the sum of which shall be the amount of tax due for the fiscal year.

# Line 7: Enter the total amount of credit claimed from Form 83-

401, line 3. For limitations, see the "General
Restrictions on Incentive Credits" section of this booklet.

Line 8: Enter the net income tax due (line 6 minus line 7). If line 7 equals or exceeds the amount shown on line 6, enter a zero.

# PAYMENTS AND TAX DUE

Line 9: Enter the total franchise and income tax due (add line
4 plus line 8). S corporations, enter the amount from line 4; composite and electing pass -through entity S corporations, enter the amounts from line 4 plus line 8; and composite and electing pass -through entity partnerships, enter the amount from line 8.

Line 10: Enter the amount of overpayment from the previous filed return. The overpayment from the prior year should be the amount shown on the previous return as an overpayment to be credited to the next year.

Line 11: Enter the total amount of estimated tax payments and payment with extension. This amount should equal the total of quarterly estimated income tax payments and the amount paid with the request for an automatic extension of time to file.

# Line 12: Enter the total amount of taxes paid on your behalf by electing pass-through entities, from Form 84-161, line

3D. If credit for tax paid on an electing Pass-Through
Entity Tax Return is not being claimed, enter zero.

In order to take this credit, you MUST file Form 84-161,
Tax Credit For Income Tax Paid By Electing Pass -
Through Entity, to determine the amount of credit for taxes paid on your behalf by electing pass -through entities. The K-1(s) you received from electing passthrough entities must be attached to the return.

Line 13: Enter the total amount of previous payments made for the tax year (line 10 plus line 11 and line 12).

Line 14: Enter the net total franchise and income tax due. This is the amount of total tax due less previous payments
(line 9 minus line 13).

Line 15: If the current Mississippi income tax liability (line 8) is
$200 or less, then estimated income tax payments are not required for this year. If the current year Mississippi income tax liability exceeds $200, Form 83-305 (S corporations) and Form 80-320 (composite partnerships only) should be completed and attached to the return if filing a composite or electing pass -through entity return.
S corporations enter the amount from Form 83- 305, line

1. Partnerships enter the amount from Form 80-320, line

Line 16: Enter the amount of interest due on late payment of tax.
An extension of time only extends the time for filing a return, not payment of the tax. I f the income and franchise tax is not paid by the original due date of the return, then interest is due at the rate of 1/2 of 1% per month.

Line 17: Enter the amount of penalty due on late payment of tax. An extension of time only extends the time for filing a return, not the payment of tax. The penalty imposed for failure to pay the tax when due is 1/2% per month, not to exceed
25% in the aggregate.

Line 18: Enter the amount of penalty due for failure to file a return by the due date of the return. The penalty for failure to file a return is 5% per month not to exceed 25% in the aggregate. The penalty imposed for failure to file is based on the additional amount of tax due. Such failure to file penalty shall not be less than $100 for income tax.

Line 19: Enter the balance of tax due (if line 10 is larger than line
13). This is the amount of total tax due less previous payments plus interest and penalties (add line 14 through line 18).
Line 20: Enter the amount of overpayment, if any ( if line 13 is larger than line 9 plus line 15, subtract line 9 and line 15 from line 13).

Line 21: Enter the portion of line 20 that you wish to carry forward and credit against your next year's tax liability. This credit will be considered for estimated income tax purposes as a first quarter payment.

Line 22: Enter the portion of line 20 that you wish to be refunded.
The total of line 21 and line 22 should equal line 20.

Generally, all domestic and foreign pass -through entities having income from sources within Mississippi must complete Form 84-122 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 state purposes. This schedule highlights some of the differences but is not an all -inclusive list. The Mississippi Administrative Code and
Regulations are available on our website at www.dor.ms.gov.
Multistate construction contractors and producers of mineral or natural resource products are required to use direct accounting and file Form 84-124. In this situation, lines 1 through 24 of this form are not completed unless the taxpayer also has income apportionable to this state from another line of business.

Lines 19, 20, 21 of this form do not apply to taxpayers doing business only in Mississippi.

Line 1: Enter the amount of taxable income (loss) (before net operating loss and special deductions) per federal
Form 1120S (S corporations) and federal Form 1065
(partnerships).

Line 2: Enter the combined amount of the pass -through income items shown on federal Form 1120S/1065
Schedule K. Long term and short-term capital losses are included only to the extent of current year capital gains.

Line 3: Enter the combined amount of pass-through deductions shown on federal Form 1120S/1065, Schedule K.

Line 4: Enter the total of lines 1 plus 2 less line 3. This amount represents federal net income.

# Line 5: Enter the amount of state, local and foreign government income taxes claimed as a deduction on Form

1120S/1065.

Line 6: Enter the amount of interest on obligations of states and political subdivisions thereof (other than Mississippi) received by the corporation, net of expenses.

# Line 7: Enter the amount of depletion claimed on Form

1120S/1065 in excess of the cost basis of the asset on which the depletion is claimed.

Line 8: Enter the amount of special depreciation allowance claimed for federal tax purposes. Federal Form 4562 must be completed twice and attached immediately after
Form 84-122.

The first submission reflects the deductions taken for federal income tax purposes. The second submission should be labeled "Mississippi" at the top of the form and will compute the apportionable and/or allocable depreciation deduction according to Mississippi statutes in effect in the year the business assets were placed in service. Expenditures for business assets placed in service after December 31, 2022, are eligible for 100% bonus depreciation.

Any difference between the two submissions resulting from the special depreciation allowance is reported as an increase on this line. Any additional depreciation expense, for purposes of this state, due to the basis adjustment not being made is reported on line 15 of this form.

If electing to take a full and immediate deduction for specified research or experimental expenditures , and/or the 100% bonus depreciation deduction, enter the amount here and check the appropriate checkbox(s) at the top of the form.

Line 9: Enter any other additions required by law. Other additions include but are not limited to 1) charitable

contribution carryovers, 2) unrecognized installment sale gains, and 3) add back of intangible expenses and costs and interest expenses and costs incurred with certain related members.

For more information on treatment of installment sales, as well as the years effected, see Miss. Code
Ann. § 27-7 -9. Intangible expenses and costs and interest expenses and costs incurred with certain related members must be added back to income. For additional details, see Miss. Code Ann. § 27-7-17(2).

Line 11: Exempt interest received on direct U.S. Government obligations (see Title 35, Part III, Subpart 02,
Chapter 04 of the Miss Admin Code on what constitutes a direct obligation) is not taxable to
Mississippi. Enter the amount of such interest reported as income on Form 1120S/1065, net of expenses.

Line 12: Enter the amount of wage expense that was not deducted on Form 1120S/1065 because a federal tax credit was taken in lieu of an expense.

Line 13: Enter the income/loss from a partnership or other flow-through entity. Flow -through entity income is allocated based on the source as determined in the hands of the flow -through entity rather than the owner.

Line 14: Multistate construction contractors and producers of mineral or natural resource products must use direct accounting (Form 84-124) to report the income from these lines of business. Enter the income (net of expenses) from these lines of business as reported on federal Form 1120S/1065.

For further information concerning accounting methods for contractors and mineral producers see
Title 35, Part III, Subpart 08, Chapter 06 of the Miss.
Admin. Code for details. If this is your only line of business in Mississippi, skip lines 1 through 24 and start with line 25.
Line 15: When a special depreciation allowance is taken for federal tax purposes, the depreciable base must be reduced by the amount of the allowance. Enter the additional depreciation expense for purposes of this state due to the basis adjustment not being made for state purposes. Attach supporting computations for any amounts claimed.
For tax years beginning after December 31, 2022, if electing to take the 100% bonus depreciation deduction, enter the amount here and check the appropriate checkbox at the top of the form.

Line 16: Enter any other deductions authorized by law . For each adjustment, provide an explanation of the basis for exclusion and a schedule showing how the amount is computed. In particular, gain from the sale of an interest in certain types of domestic entities may not be recognized for state purposes. If this is applicable, provide a schedule showing the computation of the non-recognized gain. For more details on what qualifies for this exclusion, see Miss.
Code Ann. §27-7-9(f)(10).

For tax years beginning after December 31, 2022, if electing to take a full and immediate deduction for specified research or experimental expenditures, enter the amount here and check the appro priate checkbox at the top of the form.

Line 18: Adjusted federal Form 1120S/1065 income (loss) subject to apportionment (line 4 plus line 10 minus line
17). If this corporation is not doing business in other states (as opposed to multiple states) skip lines 19 through 21 and enter the amount of this line on line

Line 19: Enter the amount of non-business income (loss) shown on the Non-business Income Worksheet, Form 84-150, column E, line 2.

Line 23: Enter the amount of nonbusiness income (loss) allocated to this state shown on the Nonbusiness
Income Worksheet, Form 84-150, column F, line 2.

Line 24: Enter the amount of Mississippi sourced income (loss) received from flow -through entities (attach Mississippi
K-1s).

Line 25: Enter the amount reported on Form 84-124, page 2, line 31 and/or page 3, line 46.

Line 26: Enter other adjustments required by law. Attach a schedule of computations.

Line 27: Enter the amount of income exemption. When filing the state tax return claiming an exemption, attach a schedule showing the calculation of how the exemption was calculated, a copy of the certification from the
Mississippi Development Authority (MDA) and t he completed application.

# Line 28: Income apportioned and directly allocated to

Mississippi (sum lines 22 through 27). Stop here unless you are filing a composite return or an electing pass-through entity. If you are filing a composite return, enter the amount of composite net income
(loss) from line 28 that is from composite partners on line 29. The amount from line 28 should equal the composite income (loss) amount from Form 84-131, line 4a. If you are filing as an electing pass -through entity, skip to line 33 and enter the amount from line 28 on line 33.

Line 30: Enter the amount of composite filing adjustment. For details of how to compute the adjustment, view the
"Composite Filing" section of this booklet.

# Line 31: Deduct any available separate company composite

Mississippi net operating loss carryover or carryback to the extent of composite income. Attach a completed
Form 84-155. Mississippi does not conform to federal net operating loss rules.

Line 32: Mississippi composite income subject to tax (lines 29 less line 30 and line 31). If positive, report this amount on Form 84-105, line 5. Only income of qualified nonresident partners electing to be in a composite filing is included on this line. All other partners' income is reported on their respective Mississippi K-1's and as a part of their respective Mississippi individual income tax filings.

# Line 34: Deduct any available electing pass -through entity

Mississippi net operating loss carryover or carryback to the extent of electing pass -through entity income.
Attach a completed Form 84-155. Mississippi does not conform to federal net operating loss rules.

Line 35: Mississippi electing pass -through entity income subject to tax (line 33 less line 34). If positive, report this amount on Form 84-105, line 5. If negative, enter zero on Form 84-105, line 5.

Schedule K is a summary schedule of all shareholders' shares of the corporation's income (loss), credits, etc. All corporations must complete this form.

Column A: Enter the name, FEIN or SSN of each owner(s) or partner(s) of the entity.

Column B: Enter the owner(s) or partner(s) ownership percentage and state of residence. Enter the percentage in decimal form. For example, 25% should be entered as 25.0000. Check the box if filing composite. See the "Composite Filing" section of this booklet for additional information on composite filers.

Column C: Enter each owner or partner share of
Mississippi income (loss) on line a. Enter the credit code and the amount of the credit on line b and line c respectively.

Column D: If an electing pass -through entity, e nter the amount of tax paid by the electing pass-through entity for each partner or shareholder.

Line 2: Enter the totals from Column B through Column D.

Line 3: If applicable, enter the totals from page 2 of this form, Column B through Column D.

# Line 4: Enter the sum of line 2 and line 3 from Column B

(must total 100%). Enter the totals from line 2a and line 3a from Column C here; composite filers enter total composite income from Column C, line
4a on Form 84-122, page 2, line 29.

# Line 5: Enter the amount of total tax paid by the electing pass-through entity from Column D, line 2 plus line

The amounts to be shown on the Mississippi Schedule K -1 should represent Mississippi income and/or deductions. Due to the differences in treatment of various elements of income, expenses and/or credits for federal and state purposes, the amounts shown on the Mississippi K-1 will not necessarily be the same amounts as shown on the Federal K -1.
Determination of the amounts to be reported on the Mississippi
K-1 should be made using the owner's share of income and deductions including Mississippi apportionment.

For informational items that cannot be reported as a single dollar amount, enter "STMT" in the dollar amount entry space to indicate the information is provided on an attached statement.

Box 1: Enter the amount of ordinary business income (loss) per federal Form 1120S, page 1, line 21 (S corporations) and federal Form 1065, page 1, line 22
(partnerships).

Box 2: Enter the owner's share of rental real estate income
(loss), net of expenses.

Box 3: Enter the owner's share of Mississippi other rental income (loss), net of expenses.

Box 4: Guaranteed payments represent a division of the partner's profit. Therefore, enter the amount of payments made by the partnership to the partner for services rendered and/or or interest on capital contributions. Applicable to partnerships only.

Box 5: Enter the total owner's share of Mississippi interest income received by or credited to the entity. As a general rule, interest income constitutes gross income and is fully taxable, unless specifically exempt or excluded by statute.

Box 6a: Enter the owner's share of Mississippi ordinary dividends income.

Box 6b: Enter the owner's share of Mississippi qualified dividends income.

Box 7: Enter the owner's share of Mississippi royalties.
Box 8: Enter the owner's share of Mississippi net short-term capital gain (loss) from federal Schedule D, Form
1120S (S corporations) and federal Schedule D, Form
1065 (partnerships).

Box 9a: Enter the owner's share of Mississippi net long-term capital gain (loss) from federal Schedule D, Form
1120S (S corporations) and federal Schedule D, Form
1065 (partnerships).

FORM 84-131

Box 9b: A collectible gain (loss) is any long-term gain or deductible long-term loss from the sale or exchange of a collectible that is a capital loss. Mississippi Law does not conform to federal with respect to the tax treatment of capital gains; therefore, the gain is taxed as ordinary income.
Box 9c: Enter the owner's share of Mississippi Section 1250 gain.

Box 10: Enter the owner's share of Mississippi Section 1231 gain
(loss). Attach a copy of the federal Form 4797.

Box 11: Enter the owner's share of Mississippi income, gain, or loss not included in boxes 1 through 9. Provide a description and the amount for each item.

Box 12: Enter the owner's share of Mississippi charitable contributions made by the entity (limited to 20% of the entity's current year taxable income). Mississippi does not allow a carryover of any unused contributions deduction.

Box 13: Enter the owner's share of Mississippi Section 179 deduction. Attach a copy of the federal Form 4562.

Box 14: Enter the owner's share of Mississippi other deductions authorized by law. For each adjustment, provide an explanation of the basis for exclusion and a schedule showing how the amount is computed.

This schedule is to be completed only if the corporation has activities in another state and has income, losses, expenses, or deductions which are to be allocated ("non-business") rather than apportioned.

On lines 1a through 1i, enter any non -business income or losses, including gains (losses) from the disposition of non - business assets. Enter any expenses associated with such income (loss) including indirect expenses (such as interest expense pro-rated to "non-business" assets).

Enter in Column A each item of non-business income or loss allocated to any state, including Mississippi, and the related expenses in Column C.

Enter in Column B items allocated to Mississippi and the related expenses in Column D.

Enter the net of Columns A and C in Column E, and the net of
Columns B and D in Column F.

PART I: NET OPERATING LOSS

A net operating loss (NOL) is to be carried by the corporation to each of the two (2) taxable years preceding the year of the NOL, starting with the earliest, and then to each of the twenty (20) tax years following the year of the NOL, until the NOL is exhausted, or the carryforward period expires. An exception is when, on the original return filing, the corporation elects to forgo the carryback by checking the check box at the top of the form . In this case the NOL generated is carried forward for 20 years.

Column A: Enter the year end the net operating loss was generated.

Column B: Enter the amount of the net operating loss (this amount should be entered as a positive number).

Column C: Enter the year end in which the net operating loss deduction is taken. A net operating loss deduction can be carried back 2 years or carried forward 20 years.

Column D: Enter the amount of net operating loss deduction actually used to offset income.

Column E: Enter the remaining of unused net operating loss, if any (column B minus column D and enter the result as a positive number).

Line 1: Enter the available net operating loss.

Line 2: Enter the amount of net operating loss deduction currently used. Enter this amount on Form 84-122, line
31 (composite) or line 34 (electing pass-through entity).

Line 3: Subtract line 2 from line 1 to compute the net operating loss available for carryforward.

Every taxpayer filing a composite or electing pass-through entity return 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 filed on a composite or electing pass-through entity return and must be paid by submitting quarterly payments. The remaining of the balance is due by the due date of the return.

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 los s 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.

The entity that fails to file an estimated tax return and pay the tax within the time prescribed or underestimates the required amount shall be liable for penalty of ten percent (10%) plus interest of ½ of 1 % per month on the underpayment of tax from the date the payment is due until paid or the next payment due date, whichever is earlier.

# Line 1: Enter the amount of current year income tax due from

Form 84 -105, line 8 (composite and electing pass - through entities).

Line 2: Multiply line 1 by 90% (not applicable if using the prior year income tax liability).

Line 3: Enter the amount of prior year income tax due.

Line 4: Enter the lesser of line 2 or line 3 (except large corporations).

Line 5: Enter the amount of required estimated payment per quarter by dividing line 4 by four.

Line 6: Enter the appropriate months of the composite or electing pass-through entity's tax year in column (a) through column (d).

Line 7: Enter the amount from Part 1, line 5 in each column.
The cumulative total should not be less than 90% of the income tax due for the year (composite or electing pass-through entities).

Line 8: Enter the actual amount of estimated tax paid each quarter.

Line 9: Enter in column (a) any overpayment from the previous year. Enter any excess from the previous quarter(s), line 9, in column (b) through column (d).

Line 10: Total l ine 8 plus line 9 minus line 7 and enter the amount in column (a). If the result is negative
(overpayment), enter zero and carry the overpayment amount (as a positive amount) to the next quarter(s), line 9, column (b) through column (d).

Line 11: Multiply line 10 by 10%. If negative, enter zero.

Line 12: Enter the cumulative amount from line 7.

Line 13: Enter the cumulative amount of estimated taxes paid plus any overpayment from the prior year (line 8 plus line 9).

Line 14: Subtract line 12 from line 13. If the result is negative, enter zero.

Line 15: Enter the interest rate in column (a) through column
(d). Compute interest at the rate of ½ of 1% per month from the payment due date until paid or until the next payment due date, whichever is earlier.

Line 16: Multiply line 14 by line 15.

Line 17: Enter the amount of penalty from line 11, column (a) through column (d).

Line 18: Enter the amount of interest from line 16, column (a) through column (d).

Line 19: Enter the total amount of underestimated interest and penalty due (line 17 plus line 18) on this line and on
Form 84- 105, page 1, line 15 (composite S
Corporations and electing pass-through entities).

# COMPOSITE FILING

Nonresident individuals or partners without any activity in
Mississippi other than that from the pass-through entity may elect to be included in a composite return filing. Once an individual elects to be included in a composite filing, they must continue to file in this manner. Underestimate, late payment, and any other interest and penalties will be determined on the composite income.
The net income for each electing member included in a composite filing will generally be computed in the same manner as in a separate individual filing except that a deduction of $5,000.00 or 10% of the composite net income, whichever is less, is authorized in lieu of any individual exemption and deduction.
Likewise, the tax liability is computed on the combined income of all electing members on the composite taxable income.

# ELECTING PASS-THROUGH ENTITY

For calendar year 2022 and each calendar year thereafter, any partnership, S corporation or similar pass-through entity desiring to be taxed as an electing pass -through entity must have a vote satisfying the threshold required for taking official actions as specified within the entity's governing documents. If the entity's governing documents do not contain any such provisions for the approval of official actions, the election shall then be accomplished by a vote by or written consent of the owners, members, partners or shareholders holding greater than fifty percent (50%) of the voting control of the entity, and also if the entity has a governing body, by vote or written consent of the members of the governing body of the entity.
Fiduciaries are not eligible to make a pass-through entity election.
Both the election to become an electing pass -through entity
("electing PTE") and the revocation of that election is made by submitting the Pass-Through Entity Election Form, form 84- 381, to the Department of Revenue at any time during the tax year for which the entity elects to be taxed as an electing PTE, or for which the entity elects to no longer be taxed as an electing PTE, or by the due date or the extended due date of the Pass-Through Entity
Tax Return for that year, or by the date such return is filed, whichever is latest. The election shall be binding for the taxable year and all subsequent taxable years unless the election is revoked by the electing PTE. Both the election and revocation of the election shall be accomplished by vote or written consent.

An electing PTE will file the Pass-Through Entity Tax Return, form
84-105, and check the "Electing Pass-Through Entity" check box in order to be taxed at the entity level. A copy of the Pass -
Through Entity Election Form, form 84- 381, should also be attached to the return. The Mississippi Schedule K -1s, form 84-
132, for each owner, member, partner or shareholder of the electing PTE are also required to be attached to the return.
The K-1s should have the "Electing Pass -Through Entity" check box checked with the amount of tax paid by the electing PTE for each partner provided on the K-1s. The amount of tax credit paid is equal to the partner's pro rata or distributive share of the tax paid on form 84-105, line 8 by the electing PTE for the corresponding taxable year.
Each owner, member, partner or shareholder of an electing PTE shall report their pro rata or distributive share of the income of the electing PTE on their separate income tax returns. The amount of credit for taxes paid on the electing PTE will be calculated by the entity and provided to the partner on the Mississippi K-1, Form
84-132. A copy of the K-1(s) received from the electing PTE must be attached to the partner's separate return.
Any additional income tax credits generated by the electing PTE shall pass through to the owners, members, partners, or shareholders on a pro rata basis and may be claimed on their separate income tax returns. In the event an owner's, member's, partner's or shareholder's aggregate credits exceed his or her income tax liability, such excess credit shall be carried forward as an overpayment or refunded at the election of the partner.
Limitations applicable to the credits generated by the electing
PTE, other than the credit for income taxes paid by the electing
PTE, shall also apply at the owner, member, partner or shareholder level.

For more information on electing PTEs , see the " Updated
Guidance on Pass-Through Entity Election", Notice 80-23-001 and the Electing Pass -Through Entity FAQs on our website at franchise-tax.

# DISTRICT OFFICES

Gulf Coast District Service Office
1141 Bayview Ave., Ste. 400
Biloxi, MS 39530-1601
Ph: (228) 436-0554 Fax: (228) 436-0964

Hattiesburg District Service Office
P.O. Box 1709, Hattiesburg, MS 39403-1709
17 JM Tatum Industrial Dr, Ste. 2
Hattiesburg, MS 39401
Ph: (601) 545-1261 Fax: (601) 584-4051

Jackson District Service Office
P.O. Box 1033, Jackson, MS 39215-1033
500 Clinton Center Drive, Clinton, MS 39056
Ph: (601) 923-7300 Fax: (601) 923-7318

Meridian District Service Office
P.O. Box 5794, Meridian, MS 39302
900A Hwy. 19 South Meridian, MS 39301
Ph: (601) 483-2273 Fax: (601) 693-2473

Hernando District Service Office
2631 McIngvale Road, Ste. 116
Hernando, MS 38632
Ph: (662) 449-5150 Fax: (662) 449-5163

# APPENDIX COUNTY CODES COUNTY CODE COUNTY CODE COUNTY CODE

Adams 01 Itawamba 29 Pike 57
Alcorn 02 Jackson 30 Pontotoc 58
Amite 03 Jasper 31 Prentiss 59
Attala 04 Jefferson 32 Quitman 60
Benton 05 Jefferson-Davis 33 Rankin 61
Bolivar 06 Jones 34 Scott 62
Calhoun 07 Kemper 35 Sharkey 63
Carroll 08 Lafayette 36 Simpson 64
Chickasaw 09 Lamar 37 Smith 65
Choctaw 10 Lauderdale 38 Stone 66
Claiborne 11 Lawrence 39 Sunflower 67
Clarke 12 Leake 40 Tallahatchie 68
Clay 13 Lee 41 Tate 69
Coahoma 14 Leflore 42 Tippah 70
Copiah 15 Lincoln 43 Tishomingo 71
Covington 16 Lowndes 44 Tunica 72
Desoto 17 Madison 45 Union 73
Forrest 18 Marion 46 Walthall 74
Franklin 19 Marshall 47 Warren 75
George 20 Monroe 48 Washington 76
Greene 21 Montgomery 49 Wayne 77
Grenada 22 Neshoba 50 Webster 78
Hancock 23 Newton 51 Wilkinson 79
Harrison 24 Noxubee 52 Winston 80
Hinds 25 Oktibbeha 53 Yalobusha 81
Holmes 26 Panola 54 Yazoo 82
Humphreys 27 Pearl River 55 Out-of-State 83
Issaquena 28 Perry 56

# TAX CREDIT CODES CODE CREDIT CODE CREDIT

• 02 Premium Retaliatory 26 Historic Structure Rehabilitation (Attach Statement)
  • 03 Finance Company Privilege * 27 Long Term Care

05 Jobs Tax 28 New Markets
06 National or Regional Headquarters 29 Biomass Energy Investment
07 Research and Development Skills 30 Wildlife Land Use
08 Employer Child / Dependent Care 31 Prekindergarten Credit
09 Basic Skills Training or Retraining 32 Headquarters Relocation Credit
10 Reforestation 34 Qualifying Charitable Contribution Credit Approved by DOR

• 11 Gambling License Fee 35 Foster Care Charitable Credit
• 12 Financial Institution Jobs 36 Business Contributions to Eligible Charitable Organizations

13 Mississippi Revenue Bond Service 37

Endowment Fund Charitable Credit
14 Ad Valorem Inventory 38 Inland Water Transportation
15 Export Port Charges 39 Pregnancy Resource Charitable Contribution Credit
16 Insurance Guaranty 40 Railroad Infrastructure Tax Credit
17 Import Credit * 41 Blood Donation
18 Land Donation 42 Transitional Home Charitable Contribution Credit
19 Broadband Technology 43 Low-Income Health Care Services Charitable Contribution Credit
21 Brownfield Credit * 44 Dependent Care Credit
22 Airport Cargo Charges 45 Food Bank Charitable Contribution Credit
23 Manufacturing Investment Tax Credit 46 Blighted Property Rehabilitation Credit
24 Alternative Energy Jobs * 50 Bank Share
25 Child Adoption 60 Mississippi Flexible Tax Incentive Act (MFLEX)
*Carryover not available