35 Miss. Admin. Code Pt. III, Subpt. 9, Ch. 01 — Partnerships

100 Definition
For purposes of this regulation, the term "partnership" includes a syndicate, group, pool,
joint venture or other unincorporated organization through or by means of which any
business, financial operation or venture is carried on, and which is not within the meaning
of this title, a corporation or a trust or estate.
101 Return

# 1.

Every partnership, domestic or foreign, deriving income from property owned
within the State of Mississippi, or business, trade, profession or occupation, carried
on within the State shall make a return for each taxable year. The return shall
include the names, addresses and social security numbers or identification numbers
of all partners who are entitled to share in the partnership net income. The return
shall be signed by any one of the partners and shall be filed on prescribed forms
with the Commissioner on or before the due date as provided by statute.

# 2.

The individual partners are subject to tax upon their distributive share of the
partnership net income , whether distributed to them or not. The partnership net
income shall be computed in the same manner and on the same basis as the net
income of an individual, except that the deduction for contributions or gifts is not
allowed. These deductions are allowed to the partners in their individual return.

# 3.

Where the result of partnership operation is a net loss, the loss will be divisible by
the partners in the same proportion as net income would have been divided (unless
the partnership agreement provides otherwise) and may be taken by the partners in
their return. The amount of partnership loss that may be allowed to a partner is
limited to the amount of the adjusted basis of this interest in the partnership at the
end of the partnership taxable year in which the loss occurred.

# 4.

Payments made to a partner for services rendered and for interest on capital
contributions are not deductible in computing the net income of the partnership,
such payments being held to represent a division of partner profits.
102 Nonresident Partner
A nonresident individual, who is a member of a partnership owning property or doing
business in the State of Mississippi, is subject to tax on his share of the partnership net
income, whether distributed or not. If the partnership does business both within and
without the state, it will be necessary to compute the income (or loss) of the partnership
from sources within the state separately from the other income in order to determine the
amount of income taxable to (or the amount of the loss deductible by) the nonresident
partners. The nonresident partner is subject to tax only on such share of his income,
whether or not distributed, as is assignable to Mississippi.
103 Liability of Partnership
1. The partnership and general partners shall be jointly and severally liable for any tax
not paid by the partners. Each partner in a partnership, whether general or limited,
resident or nonresident, is responsible for paying tax on his share of the net gain or
profit from the partnership. If the collection of such tax might not be otherwise
reported by the partners, the Commissioner shall require the partnership or the
general partners to remit the tax.
2. However, the partnership may withhold five percent (5%) of the net gain or profit
of the partnership and remit to the Commissioner. The remittance shall be deemed
estimated payments of the partners and shall be allocated pro rata to the partners
estimated tax account and would be available for refund to the partner if his
individual return indicates his tax liability to be less than the five percent (5%)
withheld.
3. A partnership that elects to withhold the five percent (5%) should file the prescribed
form with the Commissioner and remit the tax. This form shall be filed by the due
date of the partnership return and a copy shall be provided to the partners after the
form is submitted to the Commissioner.
4. A partnership that has income from sources within and without Mississippi should
withhold from Mississippi source income only.
104 Composite Returns
1. A partnership is allowed to file a composite return on behalf of its partners in very
limited circumstances. A composite return is a return in which a partnership pays
the income tax due for some, or all, of its partners. The only partners who are
eligible to be included in the composite return are nonresident partners without any
activity in Mississippi other than that from the partnership.
2. Resident partners and nonresident partners with other activity in Mississippi cannot
be included in a composite return. Each of these partners must file his own return.
3. If a composite return is filed, the partnership return is completed like any other
partnership return, but an additional schedule is attached listing the partners , the
partner's identification or social security number, and the partner's distribution that
is to be included in the composite return. The partnership then files a nonresident
individual return under the partnership name and identification number in which it
includes the composite income.
4. The partnership is allowed to deduct 10% of adjusted gross income not to exceed
$5,000 per composite return on the income that relates to individuals as the amount
for personal exemptions or standard deductions.

# 5.

Once a partnership begins filing a composite return, it must continue unless
permission to change is granted in writing by the Commissioner.
105 Tax Years
If the taxable year of a partner is different from that of the partnership, the share of the
partnership income to be reported by that partner is based upon the income of the
partnership for any taxable year of the partnership ending with or within the partner's
taxable year.
106 (Reserved)
107 (Reserved)
Subpart 10 Other Entities and Miscellaneous