Years ago the Mississippi Legislature “borrowed” certain sales, use and payroll tax collections from a subsequent fiscal year to close a then-current year budget gap. Because Mississippi has a June 30 fiscal year end, the legislation required certain taxpayers having a monthly tax liability of $50,000 or more to accelerate 75% of their June tax liabilities to June 25 so the state could recognize that income in the current fiscal year, whereas the ordinary July 20 payment deadline would have pushed those funds into the following year. Once enacted, that “temporary” fix was never removed due to the effect it would have on the budget.
On Thursday, the House of Representatives passed HB 1139 to repeal this prepayment requirement, meaning all June tax liabilities would be remitted in full by July 20 consistent with other monthly returns and payments. The Senate passed a companion bill, SB 2843, that would phase out that requirement by 2024 in contrast to the House’s immediate repeal. These bills would be effective July 1, 2021, although the Senate bill still contains a reverse repealer provision. These bills are likely going to conference committee to be reconciled and finalized.