Mississippi taxpayers are seeing green! On August 7, 2014, the Mississippi Supreme Court invalidated a sales and use tax regulation in Mississippi Department of Revenue v. Mississippi Power Company, No. 2013-CA-01234-SCT (Miss. Aug. 7, 2014). In that case, the Mississippi Department of Revenue (the “MDOR”) attempted to impose more restrictive requirements in the regulation, Miss. Reg. 35.IV.7.03(302), than the terms of the underlying statute on the exemption for pollution control equipment. This ruling could directly affect virtually all Mississippi manufacturers and custom processors subject to federal or state pollution control requirements. It also serves as another reminder that all taxpayers should closely scrutinize restrictions and conditions contained in the MDOR’s exemption and incentives regulations and policies to ensure those rules do not impose limitations inconsistent with the underlying tax statutes. This case is also interesting given the similar language in Louisiana’s statutory exemption and regulatory interpretation of the Louisiana sales and use tax exemption for pollution control equipment.
Check out our Client Alert on the Mississippi Power Company decision.