MCA Chapter 38

in effect

Miss. Code Ann. § 27-38-1 Short title.

This chapter may be cited as the “Mississippi Telecommunications Tax Reform Act.”

Miss. Code Ann. § 27-38-3 Legislative findings; purpose.

The Legislature finds that one measure of the state’s economic competitiveness is the presence of an efficient and affordable telecommunications infrastructure using the latest technological advancements. The Legislature further finds that the telecommunications industry is undergoing a dramatic change that is altering the identity of its participants, the nature of services that the industry provides, and the methods used to deliver those services. The Legislature finds that the telecommunications industry is becoming increasingly competitive and that full and fair competition within the telecommunications industry is beneficial to all Mississippians. The Legislature further finds that existing Mississippi ad valorem property tax laws place certain telephone companies at a competitive disadvantage because their property is classified for ad valorem tax purposes as “public utility property” and is assessed at the rate of thirty percent (30%) of such property’s true value while many of their competitors’ property is not classified as “public utility property” and is therefore assessed at the rate of fifteen percent (15%) of such property’s true value. The Legislature finds that the competitive inequities engendered by such existing Mississippi property tax laws hinder the investment in the state’s telecommunications infrastructure. The Legislature finds that the best method to mitigate the effects of such competitive disadvantage is to create a partial exemption for that particular species of property owned by telephone companies that is assessed at the higher rate. This partial exemption is most effectively implemented as an ad valorem tax refund from the State of Mississippi in an amount equal to the portion of the ad valorem taxes paid by such telephone companies that is attributable to the higher assessment rate. The Legislature further finds, however, that it is in the best interests of the State of Mississippi and its political subdivisions that the tax revenues available to the state should not be diminished by the tax refunds granted to such telephone companies; and that an expansion of the sales tax base to include interstate telecommunications services is expected to provide tax revenues to the state that are approximately equal to the amount of the tax refunds granted to such telephone companies. Furthermore, the Legislature finds that it is in the best interests of Mississippi consumers of telecommunications services that any tax savings experienced by such telephone companies be passed on to consumers in the form of reductions in the prices charged for the services provided by such telephone companies. Accordingly, the Legislature finds that there is a compelling public need to effect these changes in the tax system of the state in order to: Avoid placing certain telecommunications services providers at a competitive disadvantage; Provide purchasers of telecommunications services with greater choices and lower prices; and Preserve the revenue base of the existing property tax system for political subdivisions of the state.

Miss. Code Ann. § 27-38-5 Certain providers of telecommunication services entitled to refund of ad valorem tax; when refund payments due; refund payments to be made from Telecommunications Ad Valorem Tax Reduction Fund; proportionate reduction of refunds in the event of insufficient monies in Fund; unpaid refunds to carry forward to succeeding taxable years; excess amounts in Fund to be transferred to Motor Vehicle Ad Valorem Tax Reduction Fund.

With respect to ad valorem taxes becoming due after January 1, 2001, every person providing telecommunications services subject to sales tax under Section 27-65-19(1)(d), Mississippi Code of 1972, and which operates in more than six (6) counties, shall be entitled to a refund from the State of Mississippi in an amount equal to fifty percent (50%) of the aggregate amount of the ad valorem tax paid by such person on Class IV property, as defined in Section 112, Mississippi Constitution of 1890, to local taxing districts. On or before March 15, 2001, and on or before March 15 of each year thereafter, the Department of Revenue shall pay all refunds to which telecommunications service providers are entitled under the provisions of subsection (1) of this section for ad valorem taxes that became due on or before the first day of February immediately preceding March 15. The payments made pursuant to subsection (2) of this section shall be paid by the Department of Revenue exclusively out of the Telecommunications Ad Valorem Tax Reduction Fund created pursuant to Section 27-38-7. To the extent that the amount contained in such fund does not equal or exceed the payments prescribed by this section, such payments shall be proportionately reduced by the amount of the shortfall; provided, however, that any reduction shall be carried forward and paid to the respective telecommunications service provider in any succeeding taxable year or years in which monies remain in the fund after payment of all refunds pursuant to subsection (2) of this section for such year. The Department of Revenue shall determine the amount of any reductions pursuant to this subsection. On or before April 15, 2001, and on or before April 15 of each year thereafter, amounts in the Telecommunications Ad Valorem Tax Reduction Fund, which are in excess of the amounts necessary to pay all refunds pursuant to subsection (2) of this section and all amounts carried forward pursuant to subsection (3) of this section shall be transferred into the Motor Vehicle Ad Valorem Tax Reduction Fund established in Section 27-51-105.

Miss. Code Ann. § 27-38-7 Telecommunications Ad Valorem Tax Reduction Fund established; Fund administered by State Tax Commission.

There is created in the State Treasury a special fund to be known as the Telecommunications Ad Valorem Tax Reduction Fund, into which shall be deposited the money specified in Section 27-65-75(15) and such other money as the Legislature may provide by appropriation. The money in the fund shall be used to make the payments provided for in Section 27-38-5. The Telecommunications Ad Valorem Tax Reduction Fund shall be administered by the State Tax Commission, and money in the fund shall be expended upon appropriation by the Legislature. Unexpended amounts remaining in the fund at the end of the state fiscal year shall not lapse into the State General Fund, and any interest earned on amounts in the fund shall be deposited to the credit of the fund. The State Tax Commission shall make the calculations necessary to make the distributions required pursuant to Section 27-38-5, and shall make the transfer of unexpended amounts required to be made pursuant to Section 27-38-5.

Miss. Code Ann. § 27-38-9 Rate reduction required of providers that experience tax savings.

To the extent that a person providing telecommunications services that are regulated by the Mississippi Public Service Commission experiences a tax savings as a result of the provisions of this chapter, such savings shall inure to the benefit of the customers of such person in a manner to be determined by the Mississippi Public Service Commission. The Mississippi Public Service Commission shall issue a rate reduction order implementing the provisions of this section on or before December 31, 2000.