35 Miss. Admin. Code Pt. IV, Subpt. 5, Ch. 09 — Car Washes

Levy
100 Section 27-65-23 of the Mississippi sales tax law taxes car washing with an exemption
provided in Section 27 -65-111(x) for self -service, coin operated car washes and car
washes performed using portable high pressure washing equipment when the service is
performed on the premises of the customer.
101 Self service, coin operated car washes where the customer deposits money for the car
wash are exempt. This includes self -service bays where the customer washes his own
vehicle or where the vehicle is washed by automatic wash equipment. Automatic car
wash bays located at facilities such as convenience stores, gas stations and oil change
facilities are considered to be self -service, coin operated car washes and are exempt. In
order for a car wash facility to be exempt, the facilities' employees cannot provide any
assistance in the washing, drying or detailing of the automobile. Manual car washes,
detail shops, and those with a mixture of manual and automatic services are subject to tax
at the regular retail rate.
102 (Reserved)
Purchases
200 Exempt car washes must pay tax on any supply items such as soap, wax, water, or any
other items dispensed through the washing equipment. The car wash operator should also
pay tax on the purchase of items sold through vending equipment located on the
premises.
201 Car wash facilities whose services are taxable may buy items exempt from tax if they
remain with the car, such as wax. Purchases of supplies that are used or consumed by the
car wash in performing its service are taxable. These include items such as soap, water,
tire cleaner, and rags.
202 (Reserved)
Sub Part 06 Utilities
Chapter 01 Electric Power, Light, Gas and Other Fuel Distributors
100 Levy
101 Pursuant to Miss. Code Ann. Section 27 -65-19(1)(a), sales to consumers of electricity,
natural gas, liquefied petroleum gas or other fuels and services related thereto by electric
power associations, natural gas districts, municipalities, privately owned businesses or
stock companies, or any other persons are taxable on the gross income of the business at
the regular retail rate of sales tax, except as otherwise provided. These sales are exempt
when sold for residential heating, lighting, or other residential, noncommercial,
nonagricultural use.
102 Pursuant to Miss. Code Ann. Section 27 -65-19(1)(b)(ii), sales of electricity, current,
power, steam, coal, natural gas, liquefied petroleum gas or other fuel sold to a producer
of oil and gas for use directly in enhanced oil recovery using carbon dioxide and/or the
permanent sequestration of carbon dioxide in a geological formation is taxable at the
reduced 1 ½% rate.
103 (Reserved)
200 Residential Usage
201 In order to qualify for the residential exemption, the utilities must be sold to, billed to,
and paid for by the homeowner or resident of the facility. Residential customers may
include, but are not limited to, privately owned hunting and fishing camps, summer
homes, cabins, or apartments.
202 Hunting or fishing camps that provide hunts and/or accommodations for a fee are not
allowed the residential exemption and are subject to the regular retail rate of tax. Vacant
apartments with utilities being billed to the apartment complex or manager are not
eligible for the residential exemption. Private homes or residences owned by a business
or corporation that are used for commercial purposes and that may be used to provide
overnight stay on a temporary or transient basis are subject to the regular retail rate of
tax. Such common establishments include bed & breakfast facilities.
203 Apartments rented to non -transient customers where utilities are sold to, billed to and
paid for by the apartment owner are eligible for the residential exemption as long as the
utilities are separately metered between residential and commercial use.
204 Any apartment or home that has mixed usage (residential/commercial) must be taxed at
the regular retail rate unless there is a separate meter for the business (ex. business shop,
poultry farm, commercial barn, repair garage, etc.). This provision does not include
homes that also contain a home office.
205 Charges billed to an apartment owner or homeowner's association for commercial use in
common areas such as, but not limited to, street lighting, subdivision entrance lights,
swimming pools, recreational facilities, leasing offices, clubhouses and irrigation
sprinkler systems are not residential usage and are taxable at the regular retail rate of tax.
206 (Reserved)
300 Exemptions
301 Sales of electricity, natural gas, liquefied petroleum gas or other fuels and services are not
subject to sales tax when sold to a qualified exempt organization described in Mississippi
statute.
302 Pursuant to Miss. Code Ann. Section 27 -65-19(1)(a)(ii), sales of electricity, current,
power, natural gas, liquefied petroleum gas or other fuel for heating, lighting, or other use,
and sales of potable water to a church exempt from federal income taxation under 26
USCS Section 501(c)(3) shall be excluded from taxable gross income of the business if
the exempt sales are utilized on property that is primarily used for religious or educational
purposes. Any church purchasing the above utilities may sign an affidavit attesting to the
fact that they are exempt from federal taxation and that they qualify to be exempt from
sales tax. Utility providers can accept this affidavit or the 501(c)(3) certificate from the
Internal Revenue Service as evidence that the church qualifies for the exemption.
303 Pursuant to Miss. Code Ann. Section 27-65-107(f), sales of fuel to a manufacturer, custom
processor, public service company or technology intensive enterprise meeting the criteria
established by the Mississippi Development Authority provided for in Section 27 -65-
17(1)(f) when used for industrial purposes are exempt from the tax levy.
303.01 A manufacturer holding a valid direct pay permit must provide their direct pay permit to
its utility providers. The manufacturer will not be charged any tax by the utility provider
but will be responsible for remitting the correct retail rate of tax for any non -industrial
usage directly to the Department of Revenue on their Use Tax return. The direct pay
permit should be used for all utility purchases including electricity, gas, and water. Any
business eligible for the exemption that does not hold a direct pay permit must complete
the Affidavit for Utility Exemption found on the Department's website and provide a
copy to the utility company. Utility companies must keep their customers direct pay
permit or affidavit as documentation in order to sell fuel for non -residential purposes
exempt.
303.02 The exemption is applicable to certain businesses, such as a manufacturer, but is also
applicable to certain specific uses, such as cotton ginning. The following provides some
examples of the types of businesses or the types of special usage that qualify for the
exemption.

# 1.

Commercial Bakeries

# 2.

Shipbuilders

# 3.

Soft drink bottlers

# 4.

Poultry brooders, incubators and hatcheries

# 5.

Cold storage processors

# 6.

Commercial horticulturists and greenhouses

# 7.

Pipeline compressor or pumping stations

# 8.

Cotton compresses and gins

# 9.

Creosoting and treating plants

# 10.

Dairy barns

# 11.

Electricity generating plants

# 12.

Electric power sub-stations

# 13.

Feed mixers and processors

# 14.

Agricultural irrigation

# 15.

Garment plants

# 16.

Concrete and asphalt plants

# 17.

Laundries and dry cleaners

# 18.

Custom meat processors

# 19.

Milk processors

# 20.

Printing shops

# 21.

Sawmills

# 22.

Steel fabricators
304 The sales of fuel used in the production of electric power by a company primarily
engaged in the business of producing, generating, or distributing electric power for sale
are exempt from tax, pursuant to Miss. Code Ann. Section 27-65-107(e).
305 Pursuant to Miss. Code Ann. Sections 27-65-107(g) and (h) the exemption also applies to
agricultural use which includes the sale of fuels to or used directly in:
1. Commercial fishermen
2. Shrimper or oystermen
3. The production of poultry or poultry products
4. The production of livestock and livestock products
5. The production of domesticated fish and domesticated fish products
6. The production of marine aquaculture products
7. The production of plants or food by commercial horticulturists
8. The processing of milk and milk products
9. The processing of poultry and livestock feed
10. The irrigation of farm crops.
306 (Reserved)
400 Natural and Byproduct Gases
401 Pursuant to Miss. Code Ann. Section 27 -65-19(1)(b)(i) sales of carbon dioxide, either
naturally occurring or man -made, are subject to a reduced 1½% rate when purchased for
use in a carbon dioxide enhanced oil recovery operation or for permanent storage in the
ground.
402 Miss. Code Ann. Section 27 -65-101(1)(n) provides that the value of natural gas lawfully
injected into the earth for cycling, repressuring or lifting of oil, or lawfully vented or
flared in connection with the production of oil is exempt from sales tax. However, the
sale of natural gas for non -industrial use, non -residential use, is taxable at the regular
retail rate except as provided in Section 401.
403 (Reserved)
500 Taxability of Other Income
501 All receipts from customers which are not refundable, or which are not investments in a
marketable equity are included in gross income, taxable at the appropriate rate applicable
to the customer. Examples are:
1. Connection or reconnection charges
2. Contributions to line extensions or relocations (aid to construction)
3. Forfeited membership deposits
4. Membership fees and deposits (non-refundable)
5. Sales of electricity, gas and other fuel
6. Service calls on property of customer (meter test, etc.)
502 Contributions to line extensions or relocations (aid to construction) made during
construction of a residence when billed to the contractor are taxable at the regular retail
rate. All charges billed to the homeowner are residential and exempt. Utilities billed to a
contractor for temporary use during construction are taxable at the regular retail rate.
503 Sales of appliances and the installation or servicing thereof, as well as sales of any other
merchandise to residential consumers are taxable at the regular retail rate of tax. This
includes accommodation sales and sales to employees.
504 All receipts for the use of electric charging stations including fees for electricity, charging
time, idle time, and any other fees are taxable at the regular retail rate of sales tax. These
fees are included in gross income related to the purchase of electricity pursuant to Miss.
Code Ann. Section 27-65-19(1)(a)(i).
505 (Reserved)
600 Purchases
601 Purchases by utility companies are subject to tax as follows:
Private or Public
Utilities
Governmental
Utilities
EPA's
Automobiles, trucks, etc. (10,000
pounds or less gross weight)
5% 0% 3%
Automobiles, trucks, etc. (over 10,000
pounds gross weight)
3% 0% 1%
Electricity or other fuel for use in
operating the generating or distribution
facility
0% 0% 0%
Manufacturing machinery and
machine parts
1 ½% 0% 1%
Motor Fuel 0% 0% 0%
Office furniture and equipment Regular retail rate 0% 1%
Other property for use in operating the
generating or distribution system
Regular retail rate 0% 1%
Tangible personal property and
services for resale in the regular course
for business
0% 0% 0%
Telephone, lights and water Regular retail rate 0% Regular retail
rate
Tools and equipment Regular retail rate 0% 1%
602 Rental or lease by utility companies of tangible personal property is taxed at the same
rates as sales of the same property.
603 Consumers who purchase electric power directly from the Tennessee Valley Authority
are liable for use tax on the purchase price. The Use Tax Law applies the same rates as
are levied under Sales Tax Law on similar transactions.
604 The use or consumption by the producer, manufacturer or distributor of the product or
service produced, manufactured, or purchased wholesale is taxable at the rate applicable
to the use of the product. The tax due is measured by the cost or value of the product or
service.
605 (Reserved)
700 Filing Requirements
701 Any person rendering taxable utility services must complete the Distribution of Sales Tax
by Cities Schedule as part of the sales tax return filing. The 2% tax discount does not
apply to utility charges by utility service companies. Adequate records must be
maintained to substantiate tax classification of sales and purchases.
702 (Reserved)
35.IV.06.01 revised effective August 3, 2024.