Tax Law Changes:
- To provide that for the state income tax deduction authorized for depreciation, in the case of new or used aircraft, equipment, engines, or other parts and tools used for aviation, the allowance for bonus depreciation conforms with the federal bonus depreciation rates and reasonable allowance for depreciation is no less than one hundred percent.
- To allow an income tax deduction for otherwise deductible expenses if the payment for such expenses is made with the grant or loan program of the Paycheck Protection Program as authorized under the Coronavirus Aid, Relief and Economic Security (CARES) Act and the Consolidated Appropriations Act of 2021, the COVID19 Economic Injury Disaster Loan Program, the 2020 COVID19 Mississippi Business Assistance Act and/or the Rental Assistance Grant Program, and such expenses are allowed as deductions for federal income tax purposes.
- To remove the provision that requires employers with an average monthly withholding tax liability of at least $50,000 for the preceding calendar year to pay, on or before June 25, at least 75% of their estimated June withholding tax liability for the current taxable year or at least 75% of their June withholding tax liability for the preceding taxable year.
- To remove the provision that excludes single-family dwellings from the definition of the term “eligible property”; to revise the provisions under which a taxpayer eligible for a tax credit may claim the tax credit in phases; to remove the option, in lieu of the ten-year carryforward, of a refund paid over a two-year period in the amount of 75% of the excess credit; to allow the option, in lieu of claiming the credit, of a rebate of 75% of the amount that would be eligible to claim as a credit; to provide that the rebate shall be subject to approval by the Department of Archives and History and shall be redeemed with the Department of Revenue for an immediate cash payment; to provide that the Department of Archives and History shall not issue certificates evidencing the eligible rebate or credit which will result in credits being awarded in excess of $12,000,000 in any one state calendar year; to provide that a taxpayer claiming a credit instead of a rebate shall claim the credit on the income tax return for the tax year for which the credit is certified; to provide the order in which a rebate or credit shall be certified.
Beginning with tax year 2018, the 3% income tax rate will be phased out over a five-year period. The tax rate reduction is as follows:
Tax Year 2018
First $1,000 @ 0% and the next $4,000 @ 3%
Tax Year 2019
First $2,000 @ 0% and the next $3,000 @ 3%
Tax Year 2020
First $3,000 @ 0% and the next $2,000 @ 3%
Tax Year 2021
First $4,000 @ 0% and the next $1,000 @ 3%
Tax Year 2022
First $5,000 @ 0%
Link to MS state site: MS DOR