35 Miss. Admin. Code Pt. IV, Subpt. 3, Ch. 03 — Leased Departments

100 When an established business leases a portion of its shelves, counters or floor space to
another business or person selling tangible personal property or performing taxable
services, the sales made by the leased departments or the gross income received shall be
reported and paid by the lessor. A lessor not otherwise subject to the tax shall obtain a
license on behalf of the lessee.
101 When the lessee conducts the leased department in the same manner as a similar
established business and gives evidence to the public of conducting the department
separately from the lessor's business, the lessee may apply for a sales tax license and file
sales tax returns, provided separate records of the business are maintained. The lessor
shall be secondarily liable for the tax in instances where the lessee does not fulfill his tax
obligations under such license.
102 Use tax shall be reported and paid to the State by the lessee.
103 The word "lease" used in this rule includes permitted occupancy regardless of
consideration.
104 (Reserved)
35.IV.3.03 revised effective January 15, 2019
Chapter 04 (Reserved)
35.IV.03.04 revised effective May 1, 2019.
Chapter 05 Interstate Commerce, Sales In
100 Sales delivered outside this state
101 All sales made and taxable services performed from a business location within the state or
by a Mississip pi dealer are presumed to be taxable Mississippi sales unless and un til the
dealer can substantiate an authorized claim for exemption. In the case of exemption by
reason of delivery of the goods outside the state to an out -of-state customer, the dealer is
required to establish that such delivery did, in fact, take place and that such delivery was
a condition precedent to consummation of the sale.
102 Sales and taxable repairs of tangible personal property are exempt from the Mississippi
sales tax levy when:

# 1.

The seller is required by the sales agreement to physically deliver the goods sold in
the vendor's equipment from a point in this state to a point outside this state, not to be
returned to a point within this state, and provided that such delivery is actually made,
or

# 2.

The seller is required by the sales agreement to deliver the goods to a common carrier
or to the United States Post Office for transportation outside the state at the seller's
direction, or

# 3.

The seller is required by the sales agreement to deliver the goods outside the state by
use of an independent trucker.
103 For purposes of this Chapter, neither the purchaser nor the seller is considered a common
carrier even though they may operate as one commercially.
104 When tangible personal property is purchased in Mississippi for resale in another state by
a dealer regularly engaged in selling such property and such dealer holds a valid sales tax
permit or its equivalent for that state, the sale is exempt from tax.
105 Sales of automobiles, trucks, truck -tractors, semi -trailers, trailers, boats, motorhomes
(R.V.), travel trailers, motorcycles and all -terrain cycles which are exported from this
state within forty -eight (48) hours and registered and first used in another state are
exempt from sales tax under Miss. Code Ann. Sections 27-65-101(1)(s) and 27-65-111(i).
A properly executed Certificate of Interstate Sale must be maintained to substantiate sales
of boats, all -terrain cycles or other equipment not required t o be registered for highway
use. A golf cart, regardless of whether it receives aftermarket modifications, is not
considered an all -terrain vehicle. If the Certificate of Origin identifies the vehicle as a
golf cart, it remains a golf cart for tax purposes and would be taxable at the seven percent
(7%) regular rate of tax at the time of purchase, and would not be eligible for the forty -
eight (48) hours exemption.
106 (Reserved)
200 Sales delivered into this state
201 Persons operating a place of business in this state as well as one or more places of
business outside this state are liable for sales tax on all sales made by or delivered from
the Mississippi business and are liable for collection of use tax on all sales delivered in
Mississippi by or from their out-of-state businesses.
202 Persons who do not maintain a place of business in Mississippi but who are represented
in this state by salesmen who solicit or accept orders for merchandise which is
subsequently delivered in this state are liable for collection of Mississippi use tax.
203 Merchandise shipped from a point of origin in Mississippi which passes through another
state before reaching a point of destination in Mississippi is not considered as a sale made
through channels of interstate commerce and the receipts from the property sold are
taxable.
204 (Reserved)
300 Drop shipment sales into this state
301 A drop shipment of merchandise is a shipment from a seller directly to the retailer's
Mississippi customer, at the direction of the retailer. Generally, a retailer accepts an order
from an end customer, places this order with a third party seller, usually a manufacturer
or wholesale distributor, and directs the third party to ship the goods directly to the end
customer. This sequence of events results in two transactions: a) the sale by the primary
seller (i.e. distributor) to the retailer and b) the sale from the retailer to the retailer's
Mississippi customer.
302 If the retailer has a valid Mississippi sales tax permit, then the retailer should furnish a
copy of the permit to the primary seller, rendering the first sale a non -taxable transaction.
The retailer then collects sales tax on behalf of the state on the sale to its Mississippi
customer.
303 If the retailer is not registered to do business in Mississippi and the primary seller has
nexus with Mississippi the sale to the retailer is a taxable transaction by the primary seller
who is responsible for remitting the tax. An exception occurs when one of the following
conditions are met:
1. The Mississippi customer is a licensed dealer purchasing the property for resale
through his regular course of business. The primary seller can obtain a copy of the
Mississippi customer's sales tax permit and the resale exemption may flow through
the retailer to the seller.
2. The Mississippi customer has a Direct Pay Permit. The Direct Pay Permit
authorization may flow through the retailer to the seller.
3. The Mississippi customer is an exempt entity under the provision of the Mississippi
Sales Tax Law. The Mississippi customer must furnish proof of exempt status to the
seller. If proof of such exemption is not furnished, the sale is taxable.
304 (Reserved)
35.IV.03.05 revised effective December 1, 2019.