Corporate Income and Franchise Tax FAQs

The following is intended to provide general information concerning frequently asked questions about taxes administered by the Mississippi Department of Revenue. It is an informal interpretation of the tax law and is not intended to serve as a rule, regulation, declaratory opinion, or letter ruling. Legislation, regulations, court decisions, notices, and announcements could affect the accuracy of this information. Please refer to the Mississippi Code Annotated​ and the Mississippi Administrative Code​ for the most current version of the law and administrative procedures.

Who is required to file a corporate tax return?

What is franchise tax?

What is the minimum franchise tax due?

I am not a franchise. Why do I have to file a franchise tax return?

How do I compute the franchise tax due?

What is the date of the balance sheet I should use to compute my franchise tax return?

How do I compute the income tax due?

Does Mississippi have a minimum corporate income tax?

Does Mississippi require estimated tax payments?

Does Mississippi offer the option to submit estimated payments electronically?

Who is required to file a corporate tax return?

What are interest and penalty charges?

How does a company register to file Mississippi corporate income and franchise taxes?

Do I need to apply for a corporate identification number?

Does Mississippi offer the option to submit returns and payments electronically?

What form of payment does the Mississippi Department of Revenue accept?

Where do I mail my corporate income and franchise tax return?

What is the due date for corporate income and franchise tax returns and pass-though tax returns?

What are the requirements for filing an extension?

Who can discuss a corporate tax question with a Mississippi Department of Revenue representative?

My corporation is incorporated in another state. Am I required to register with the Mississippi Secretary of State?

What are the steps for a corporation that is no longer doing business in Mississippi and wants to withdraw from the State?

What forms are needed to amend a corporate tax return?

What is the statute of limitations for filing an amended return?

Can I obtain a letter of “good standing”?

My corporation has no activity or assets, do I have to file a tax return?

I closed my business, should I notify the Department of Revenue?

How do I file a final return?

What is the Department of Revenue’s position regarding nexus in Mississippi?

Does having an employee in Mississippi create nexus for a company based in another State?

What is a Mississippi combined income tax return and what are the requirements to file on a combined basis?

Can a combined group determine its franchise tax on a combined basis?

For apportionment purposes, does Mississippi have a “throwback” rule?

What should I do if I receive a notice of failure to file a corporate return?

Where and when do I file my corporation’s annual report?

My corporation has been suspended by the Secretary of State. What steps must I take to have my corporation reinstated?

What is the basis for suspension?

How do I file if my corporation is a Limited Liability Company (LLC)?

How do I file if my corporation is an S Corporation?

If I am filing an amended Mississippi return to carryback a Mississippi net operating loss, what documentation should I include?

What do I need to provide to the Mississippi Department of Revenue if I claimed non-business or wholly passive investment income (non-Mississippi source income)?

What information must I provide to the Mississippi Department of Revenue if I am filing an amended return due to an Internal Revenue Service Audit or an amended Federal?

Did Mississippi adopt the Internal Revenue Service’s claim of right doctrine?

How are Qualified Subchapter S Subsidiaries (QSSS) treated for Mississippi income and franchise taxes purposes?

Does Mississippi require the 50% bonus depreciation to be added back to taxable income?

If I carried back a net operating loss two years for federal purposes, am I required to carryback the net operating loss two years for Mississippi purposes?

Will Mississippi follow the IRS relating to paid preparer signature?

If a company has to file a short period return for Federal purposes, does a short period return have to be filed for Mississippi?

What U.S. Government interest is deductible?

What types of taxes have to be added to federal income?

Has Mississippi adopted the Uniform Division of Income for Tax Purposes Act (UDIPTA)?

Does Mississippi follow the Multistate Department of Revenue regulations and policies?

How do I obtain more information on business credits?

Does Mississippi allow federal income tax as a business expense deduction?

What are the filing requirements for a corporation operating in Mississippi as a partner in a partnership?

How does my nonprofit organization obtain tax exempt status?

Who is required to file a corporate tax return?

All corporations, associations, or entities doing business, earning income, or existing in Mississippi are required to file a corporate income and franchise tax return. Every corporation, domesticated or qualified to do business in Mississippi must file a return even if the corporation is inactive or not engaged in business. ​

Back to top

What is franchise tax?

A franchise tax is imposed on corporations for the privilege of doing business in the State of Mississippi. Franchise tax is due annually as long as the corporation remains incorporated, domesticated, or continues to do business in Mississippi.​

Back to top

What is the minimum franchise tax due?

$25.00​

Back to top

I am not a franchise. Why do I have to file a franchise tax return?

Franchise tax is not based upon whether or not a corporation is a franchise; however, it is a business tax imposed on every corporation for the privilege of doing business in Mississippi.​

Back to top

How do I compute the franchise tax due?

Franchise tax is computed at $2.50 per $1,000 of the value of the capital employed or the assessed property values in this state, whichever is greater. In no case shall the franchise tax computed be less than $25. ​

Back to top

What is the date of the balance sheet I should use to compute my franchise tax return?

The corporation must use the ending year balance sheet to compute franchise taxes as of the accounting year end for the corporation. ​

Back to top

How do I compute the income tax due?

Income tax is computed as follows: 3% on the first $5,000 of taxable income, 4% on the next $5,000 of taxable income, and 5% on taxable income in excess of $10,000.​

Back to top

Does Mississippi have a minimum corporate income tax?

​No.

Back to top

Does Mississippi require estimated tax payments?

Yes, every corporation and pass-through-entity with an annual income tax liability in excess of $200.00 should make estimated tax payments. You can make your estimates in TAP. When selecting the payment type, choose "estimated."​

Back to top

Does Mississippi offer the option to submit estimated payments electronically?

Yes, estimated payments can be submitted through TAP. ​

Back to top

Who is required to file a corporate tax return?

All corporations, associations, or entities doing business, earning income, or existing in Mississippi are required to file a corporate income and franchise tax return. Every corporation, domesticated or qualified to do business in Mississippi must file a return even if the corporation is inactive or not engaged in business. ​

Back to top

What are interest and penalty charges?

Interest and penalty applies to any underpayment of tax not received on or before the due date of the return. Interest is computed at the rate of 1% per month from the due date. The penalty imposed is 1/2% per month based on tax not paid by the due date not to exceed 25% in the aggregate.

Penalties are imposed for failure to file a return when due. The penalty imposed for failure to file a return is 5% per month not to exceed 25% in the aggregate. Such failure to file a return penalty shall not be less than $100 for income tax.​

Back to top

How does a company register to file Mississippi corporate income and franchise taxes?

You can register online through TAP. ​

Back to top

Do I need to apply for a corporate identification number?

The DOR assigns account numbers to all tax accounts. When registering for a tax account, you will be asked to provide your FEIN as identifying information.​

Back to top

Does Mississippi offer the option to submit returns and payments electronically?

Yes. Returns and payments may be submitted electronically through an e-file software provider or preparer. You may make payments on returns, billings and estimates online through TAP.​

Back to top

What form of payment does the Mississippi Department of Revenue accept?

You can pay online through TAP, by mailing your check, or you may pay by credit card or e-check through Official Payments​.​

Back to top

Where do I mail my corporate income and franchise tax return?

Department of Revenue

P.O. Box 23050
Jackson, MS 39225-3050​

Back to top

What is the due date for corporate income and franchise tax returns and pass-though tax returns?

The corporate income and franchise tax return is due on or before the 15th day of the 3rd month following the close of the taxable year.  Exception: Partnership returns are due on or before the 15th day of the 4th month following the close of the taxable year. ​

Back to top

What are the requirements for filing an extension?

Taxpayers requesting an extension of time must remit the tax due with the proper Mississippi Application for Extension on or before the due date of their return to receive an automatic extension of time to file their tax returns. The authorized extension of time to file does not extend the time for payment of the income or franchise tax due. The Federal extension will be accepted in lieu of the Mississippi extension if no tax liability exists on the due date of the return. ​

Back to top

Who can discuss a corporate tax question with a Mississippi Department of Revenue representative?

General tax questions that do not address confidential information filed with the Mississippi Department of Revenue may be discussed with anyone. However, confidential information such as payments received, returns, adjustments, and extensions filed, can only be discussed with an officer of the company, the preparer, or a person who has a Mississippi Power of Attorney. ​

Back to top

My corporation is incorporated in another state. Am I required to register with the Mississippi Secretary of State?

Yes.​

Back to top

What are the steps for a corporation that is no longer doing business in Mississippi and wants to withdraw from the State?

If the corporation is registered with the Secretary of State, then the taxpayer should withdraw or dissolve the corporation through the Secretary of State. To complete the withdrawal process, a final return must be filed with the Mississippi Department of Revenue. The taxpayer must ensure that the corporation does not have any Mississippi assets or income in order for the final return to be valid. 


Back to top

What forms are needed to amend a corporate tax return?

A complete amended return must be filed using the same forms as originally filed. Any documentation supporting the adjustments must be included with the amended return. ​

Back to top

What is the statute of limitations for filing an amended return?

​A taxpayer may apply to the commissioner for revision of any return filed at any time within three years from the due date, or if an extension of time to file was granted, three years from the date the return was filed.​

Back to top

Can I obtain a letter of “good standing”?

The Department of Revenue does not issue letters of good standing. To obtain a Certificate of Good Standing, contact the Secretary of State at (601)359-1350.​

Back to top

My corporation has no activity or assets, do I have to file a tax return?

Yes. Every corporation domesticated or qualified to do business in Mississippi must file a return even though the corporation is inactive or does not have any Mississippi assets. A corporation remains subject to the filing requirements until such time as the corporation is officially dissolved or withdrawn through the Secretary of State. ​

Back to top

I closed my business, should I notify the Department of Revenue?

Yes. A final return must be filed with Mississippi Department of Revenue. ​

Back to top

How do I file a final return?

The “Final Return” check box must be checked on the face of the corporate return filed. The return is due on or before the 15th day of the third month following the closure or dissolution. ​

Back to top

What is the Department of Revenue’s position regarding nexus in Mississippi?

For Mississippi income tax purposes, nexus is defined as the operation of any enterprise or activity in Mississippi for financial profit or economic gain. For a complete listing of what constitutes nexus, see Mississippi Regulation Title 35 Part III Subpart 08 Chapter 06.​

Back to top

Does having an employee in Mississippi create nexus for a company based in another State?

Yes.​

Back to top

What is a Mississippi combined income tax return and what are the requirements to file on a combined basis?

A Mississippi combined income tax return includes two or more members of an affiliated group of corporations that are taxable in Mississippi and where one or more member(s) of the combined group is taxable in another state. While each member will compute its Mississippi taxable income (or loss) on a separate basis, the net business income (or loss) so computed for each member shall be combined to determine the net business income (or loss) of the affiliated group of corporations. ​

Back to top

Can a combined group determine its franchise tax on a combined basis?

No. Mississippi law does not authorize combined reporting for franchise tax; therefore, separate returns are required of all subsidiary corporations qualified to do business in Mississippi or which are, in fact, doing business in Mississippi. The reporting corporation must file a return that includes its franchise tax and the combined group income/ loss. However, the reporting company in a combined group can make a payment toward the members’ franchise tax liability using the Mississippi Application for Extension form 83-180. ​

Back to top

For apportionment purposes, does Mississippi have a “throwback” rule?

Yes. For corporations permitted to apportion income, only those sales made within Mississippi are required to be included in the numerator of the sales factor. Exception: If a state does not require a corporation to file an income tax return, sales generated in that state’s jurisdiction must be included in the Mississippi numerator of the sales factor. ​

Back to top

What should I do if I receive a notice of failure to file a corporate return?

If a return was filed, send a copy of the return, a copy of the front and back of the cancelled check with which payment was made, and a copy of the delinquent letter to P.O. Box 1033; Jackson, MS 39215-1033. Otherwise, if a return was not filed, mail the return, payment for taxes, interest, and penalty to P.O. Box 23050; Jackson, MS 39225-3050. ​

Back to top

Where and when do I file my corporation’s annual report?

The annual report is filed with the Secretary of State’s office with a due date of April 15th. Payments can be received electronically or mailed to: Secretary of State; Business Service; 700 North Street; Jackson, MS 39202. For more information, please contact the Secretary of State’s office at (601)359-1350.​

Back to top

My corporation has been suspended by the Secretary of State. What steps must I take to have my corporation reinstated?

In order for a company to be reinstated, all corporate tax returns, outstanding tax liabilities, penalties, and interest must be filed and paid with the Mississippi Department of Revenue. If applicable, page two of the Secretary of State form F0022 must be submitted to the Mississippi Department of Revenue. A request for reinstatement can also be made  through TAP. ​

Back to top

What is the basis for suspension?

Mississippi law requires the Department of Revenue to notify the Secretary of State when a taxable entity fails to pay and/or file any Franchise Tax return. 

Back to top

How do I file if my corporation is a Limited Liability Company (LLC)?

A domestic or foreign limited liability company (LLC) is classified as an entity for purposes of Mississippi income tax laws in the same manner as the entity is classified for federal income tax purposes. If an LLC is treated as a partnership for federal income tax purposes, it will file as a pass-through-entity for Mississippi purposes. If an LLC is treated as a corporation for federal income tax purposes, it will file as a corporation for Mississippi income and franchise tax purposes. ​

Back to top

How do I file if my corporation is an S Corporation?

S-Corporations are to file as a pass-through-entity for Mississippi purposes. The income tax is filed and paid by the shareholder on their Mississippi individual income tax return. However, a non-resident with no other interest tied to Mississippi may elect to file a PTE composite return; as a result, the income will be taxed and paid at the corporate level. Once the election to file composite is made, the taxpayer must continue to file in this manner. For corporate franchise tax purposes, all S Corporations are subject to franchise tax which is taxed and paid at the corporate level. ​

Back to top

If I am filing an amended Mississippi return to carryback a Mississippi net operating loss, what documentation should I include?

In making a claim for a net operating loss deduction, the taxpayer must file with its amended tax return a concise statement setting forth all material and pertinent facts related thereto; including form 83-155 – Mississippi Corporate NOL and Capital Loss Workshee​t. If more than one net operating loss is being utilized, the worksheet must be submitted for each loss year individually.​

Back to top

What do I need to provide to the Mississippi Department of Revenue if I claimed non-business or wholly passive investment income (non-Mississippi source income)?

For non-business income, form 83-1​50​ must be attached to the Mississippi return that clearly states the nature and/or source of the non-business income or loss in order to be considered by the Mississippi Department of Revenue. A statement must be included to outline the reasons that the income, loss, expenses, or deductions is being allocated. Wholly passive investment income from outside Mississippi will be considered only with an attached detailed explanation.

Back to top

What information must I provide to the Mississippi Department of Revenue if I am filing an amended return due to an Internal Revenue Service Audit or an amended Federal?

To document the adjustments initiated by the Internal Revenue Service, the Revenue Agent Report must be included with the Mississippi amended return. There is no penalty charged on the additional balance of tax if the amended return is filed within 30 days of closing with the IRS. If the adjustments were the result of an amended federal return filed by the taxpayer, the amended federal 1120(x) must be filed with the Mississippi amended return. If the taxpayer files consolidated for federal purposes, a proforma amended federal return should be filed as well as the amended consolidated federal return. Furthermore, a complete amended return must be filed using the same forms as originally filed. Any other documentation supporting the adjustments must be included with the amended return.​

Back to top

Did Mississippi adopt the Internal Revenue Service’s claim of right doctrine?

No.​

Back to top

How are Qualified Subchapter S Subsidiaries (QSSS) treated for Mississippi income and franchise taxes purposes?

A federal election to be treated as a Qualified Subchapter S Subsidiary (QSSS) is considered an election for Mississippi purposes, and as such, the QSSS will be treated the same for state income and franchise tax purposes. The reporting company must file a corporate tax return on behalf of the QSSS.​

Back to top

Does Mississippi require the 50% bonus depreciation to be added back to taxable income?

Mississippi does not recognize the federal deduction allowed for qualified depreciable property acquired and placed in service during the tax year; therefore, the bonus depreciation deduction must be added back to Mississippi taxable income. ​

Back to top

If I carried back a net operating loss two years for federal purposes, am I required to carryback the net operating loss two years for Mississippi purposes?

No. On Mississippi form 83-155, the taxpayer is required to make an election to carryback or carryover the Mississippi net operating loss regardless of the federal election; however, once this election is made, it cannot be revoked. Furthermore, if a taxpayer amends a federal return, the taxpayer is obligated to notify the state via amended return.​

Back to top

Will Mississippi follow the IRS relating to paid preparer signature?

Yes. Using the IRS requirements, Mississippi will permit paid preparers to sign original and/or amended returns by rubber stamp, mechanical device such as a signature pen, or computer software program.​

Back to top

If a company has to file a short period return for Federal purposes, does a short period return have to be filed for Mississippi?

​Yes.

Back to top

What U.S. Government interest is deductible?

Interest on the obligations of the United States, its instrumentalities, its possessions or upon securities issued under authority of an act of Congress is wholly exempt from tax. The term "obligations of the United States" means any United States Government obligation used to finance the national debt, e. g. U.S. Treasury Securities such as notes, bonds or certificates, U.S. Treasury bills or other instruments acknowledged by the U.S. Secretary of Treasury as an obligation of the United States.​

Back to top

What types of taxes have to be added to federal income?

​​The following types of taxes must be added back to federal taxable income for Mississippi purposes: federal and state (excluding Mississippi) income taxes; any taxes based on or measured by net income; estate and inheritance taxes; gift taxes; and cigar and cigarette taxes, gasoline taxes, and sales and use taxes if not included in business gross income, or if not incurred as an item of expense in a trade or business.​

Back to top

Has Mississippi adopted the Uniform Division of Income for Tax Purposes Act (UDIPTA)?

​No.

Back to top

Does Mississippi follow the Multistate Department of Revenue regulations and policies?

No. Although Mississippi is an Associate Member of the Multistate Department of Revenue, Mississippi does not enact the Multistate Tax Compact into our State laws. ​

Back to top

How do I obtain more information on business credits?

To obtain a detailed listing of available incentives and credits, please reference the tax incentive booklet on this website.​

Back to top

Does Mississippi allow federal income tax as a business expense deduction?

​No.

Back to top

What are the filing requirements for a corporation operating in Mississippi as a partner in a partnership?

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 individual partners are subject to tax upon their distributive share of the partnership net income (loss). The partnership net income (loss) shall be computed in the same manner and on the same basis as the net income (loss) of an individual. Deductions for contributions or gifts are allowed to the partners on their individual return. ​

Back to top

How does my nonprofit organization obtain tax exempt status?

Tax exempt status, i.e. 501 (c) (3), is obtained through the Internal Revenue Service.​

Back to top

​​

​​​