35 Miss. Admin. Code Pt. IV, Subpt. 1, Ch. 03 — Sales Tax Bonds

100 The Sales Tax Law provides that cash or surety bonds be filed in various instances where
the revenue of the State of Mississippi must be protected and the payment of taxes
assured. Bonds are required in the following circumstances, however, the Commissioner
does retain the authority to require a taxpayer to post a bond for other circumstances
where the Commissioner feels it is necessary.
101 Any taxpayer operating a business from their home or from a temporary location (less
than 90 day lease), shall be required to post a cash or surety bond prior to receiving a
Sales Tax Permit to engage in business. The cash bond or approved surety bond shall be
in an amount sufficient to cover the estimated tax liability for a six-month period. The
amount of the bond shall be set by the Commissioner.
102 A temporary location includes, but is not limited to, an event held for a limited period of
time that may include the issuance of a temporary beer license. Any taxpayer who can
demonstrate that they operate a permanent business location in this State may be exempted
from posting a bond for a temporary event.
103 Any taxpayer operating a new or used mobile home dealership shall be required to post a
cash or surety bond prior to receiving a Sales Tax Permit to engage in business. The
amount of the bond shall be $25,000 for a dealer of new mobile homes and $10,000 for a
dealer of used mobile homes, unless the taxpayer or Commissioner can show cause for
another amount to be accepted.
104 Any manufactured home dealer who files delinquent tax returns for more than one period
in a calendar year or who presents a check for payment of tax that is returned by the bank
for insufficient funds, shall be required to post a bond equal to six months' tax liability.
The six months' liability shall be determined by accumulating the past 12 months' liability
(determined by returns filed or audit results) and dividing by 2.
105 Any person who fails to comply with all the provisions of the sales tax law forfeits his
right to do business in this state until such time as the person shall comply with all the
provisions, post an adequate surety bond as established by the Commissioner and pay all
taxes legally due. A surety bond will be required for any person who:

# 1.

Fails to obtain a sales tax permit before going into business;

# 2.

Continues to operate a business after revocation of the sales tax permit;

# 3.

Fails to file their sales tax returns;

# 4.

Fails to keep adequate records and invoices as required by the sales tax laws;

# 5.

Fails or refuses to permit inspection of records; or

# 6.

Fails to pay any taxes due under the sales tax laws.
The surety bond shall be in an amount sufficient to cover the estimated tax liability for a
six months' period and conditioned that all taxes ac cruing in the future will be paid when
due.
106 A taxpayer petitioning for a hearing prior to sale of property which has been seized under
a jeopardy warrant must execute a supersedeas surety bond with a surety company doing
business in this state for double the amount of the assess ment. The bond must be
conditioned that any taxes, damages, interest and costs adjudged to be due after the
hearing will be paid promptly upon order of the Department of Revenue.
107 Contractors performing contracts in excess of $75,000 must post a bond, prior to
beginning construction, on any taxable contracts performed in this State unless the tax is
prepaid. The bonds shall be either a job bond which guarantees payment when due of the
taxes resulting from performance of a specified job or activity regardless of date of com -
pletion or a blanket bond which guarantees payment when due of the taxes resulting from
performance of all jobs or activities taxable under Miss. Code Ann. Section 27 -65-21
begun during the time period covered by the bond regardless of the date of completion of
the job. The bond must be sufficient to cover the liability for sales, use, income,
withholding and motor fuel taxes. The bond must be approved by the Commissioner.
When a bond is filed, the sales tax due under Miss. Code Ann. Section 27 -65-21 must be
paid on a monthly basis as compensation is received.
108 The surety on the tax bond is secondarily liable for all taxes due on the contract covered
by the bond. When a contractor defaults on the execution of his contract and the bonding
company acting as surety for the performance of the contract assumes completion of the
contract, the bonding company becomes primarily liable for the payment of the sales, use,
income, withholding and motor fuel taxes accruing as a result of its activities and is
subject to the same bonding requirements and MPC (material purchase certificate)
requirements as the original contractor.
109 (Reserved)
35.IV.01.03 revised effective July 1, 2018
Chapter 04 Reserved
35.IV.1.04 updated effective September 1, 2018