Tax credits; authorize for contributions by certain taxpayers to certain hospitals., the official text

MISSISSIPPI LEGISLATURE

2026 Regular Session

To: Finance

By: Senator(s) Taylor

Senate Bill 3110

(As Sent to Governor)

AN ACT TO AUTHORIZE AN INCOME TAX CREDIT, INSURANCE PREMIUM
TAX CREDIT AND AD VALOREM TAX CREDIT FOR VOLUNTARY CASH CONTRIBUTIONS BY
CERTAIN TAXPAYERS TO CERTAIN ELIGIBLE HOSPITALS; TO PROVIDE THE CRITERIA THAT A
HOSPITAL MUST MEET IN ORDER FOR A CONTRIBUTION TO THE HOSPITAL TO QUALIFY FOR
THE TAX CREDIT AUTHORIZED BY THIS ACT; TO LIMIT THE AMOUNT OF THE CREDIT; TO
PROVIDE THAT UNUSED PORTIONS OF A CREDIT MAY BE CARRIED FORWARD FOR FIVE
CONSECUTIVE YEARS FROM THE CLOSE OF THE TAX YEAR IN WHICH THE CREDIT WAS
EARNED; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE
LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1.
(1)  For the purposes of this section, "eligible
hospital" means general acute-care hospitals or rural emergency hospitals
that have forty-nine (49) or fewer licensed inpatient beds and have an
Emergency Department that provides emergency services twenty-four (24) hours a
day for each day of a week.  In
addition, in order to be an "eligible hospital," a hospital must
engage, or have already engaged, either independently or jointly with one or
more other hospitals, a healthcare consulting firm with expertise and
experience in operational and financial optimization of hospitals.  The
consulting firm will advise and assist in developing an initial strategic plan
for the hospital and in updating the strategic plan on at least an annual
basis.  As part of their engagement, the consulting firm will work with
hospital leadership and provide input in helping to identify new service
offering opportunities, improve or optimize existing service offerings, and to
help identify opportunities for efficiency improvements and cost savings.  In
lieu of engaging a healthcare consulting firm, a hospital may develop its
strategic plan from nationally accepted best practices for small or rural
hospitals.  A hospital also must engage or have already engaged a Certified
Public Accountant (CPA) firm with expertise in healthcare and hospital
reimbursement and cost reporting.  The CPA firm will provide ongoing assistance
in the form of reimbursement and cost reporting advisory services and
assistance with preparation and filing of annual cost reports.  A hospital must
have a qualified CPA firm engaged for these services prior to qualifying as an
eligible hospital.

(2)  (a)  The tax credit
authorized in this section shall be available only to a taxpayer who is a
business enterprise engaged in commercial, industrial or professional
activities and operating as a corporation, limited liability company,
partnership or sole proprietorship.  Except as otherwise provided in this
section, a credit is allowed against the taxes imposed by Sections 27-7-5, 27-15-103,
27-15-109 and 27-15-123, for voluntary cash contributions made by a taxpayer
during the taxable year to an eligible hospital.  A credit is also allowed
against ad valorem taxes assessed and levied on real property for voluntary
cash contributions made by the taxpayer during the taxable year to an eligible
hospital.  The amount of credit that may be utilized by a taxpayer in a taxable
year shall be limited to (i) an amount not to exceed fifty percent (50%) of the
total tax liability of the taxpayer for the taxes imposed by such sections of
law and (ii) an amount not to exceed fifty percent (50%) of the total tax
liability of the taxpayer for ad valorem taxes assessed and levied on real
property.  Subject to such limitation on the amount of
credit that a taxpayer may utilize in a taxable year, a taxpayer who is
allocated a tax credit under this subsection during a calendar year may utilize
the credit against the taxes imposed by Sections 27-7-5, 27-15-103, 27-15-109
and 27-15-123 for the immediately preceding taxable year, provided that the
taxpayer has not already filed an annual return for such taxes.  Any tax
credit claimed under this section but not used in any taxable year may be
carried forward for five (5) consecutive years from the close of the tax year
in which the credits were earned.

(b)  A contribution for
which a credit is claimed under this section may not be used as a deduction by
the taxpayer for state income tax purposes.

(3)  A taxpayer taking a
credit authorized by this section shall provide the name of the eligible
hospital and the amount of the contribution to the department on forms provided
by the department.

(4)  To be considered an
eligible hospital, a hospital shall provide the department with a written
certification that it meets all criteria to be considered an eligible
hospital.  The hospital shall also notify the department of any changes that
may affect eligibility under this section.

(5)  The eligible hospital's
written certification must be signed by an officer of the hospital under
penalty of perjury.  The written certification shall include the following:

(a)  Verification that
the hospital meets the definition of eligible hospital under subsection (1)(b)
of this section; and

(b)  Any other
information that the department requires to administer this section.

(6)  The department shall
review each written certification and determine whether the hospital meets all
the criteria to be considered an eligible hospital and notify the hospital of
its determination.  The department may also periodically request
recertification from the hospital.  The department shall compile and make
available to the public a list of eligible hospitals.

(7)  Tax
credits authorized by this section that are earned by a partnership, limited
liability company, S corporation or other similar pass-through entity, shall be
allocated among all partners, members or shareholders, respectively, either in
proportion to their ownership interest in such entity or as the partners,
members or shareholders mutually agree as provided in an executed document.

(8)
(a)  A taxpayer shall apply for credits with the department on forms prescribed
by the department.  In the application, the taxpayer shall certify to the
department the dollar amount of the contributions made or to be made
during the calendar year.  Within thirty (30) days after the receipt of an
application, the department shall allocate credits based on the dollar
amount of contributions as certified in the application.  However, if the
department cannot allocate the full amount of credits certified in the
application due to the limit on the aggregate amount of credits that may be
awarded under this section in a calendar year, the department shall so notify
the applicant within thirty (30) days with the amount of credits, if any, that
may be allocated to the applicant in the calendar year.  Once the department
has allocated credits to a taxpayer, if the contribution for which a
credit is allocated has not been made as of the date of the allocation, then
the contribution must be made not later than sixty (60) days from the date of
the allocation.  If the contribution is not made within such time period, the
allocation shall be cancelled and returned to the department for reallocation.
Upon final documentation of the contributions, if the actual dollar amount of
the contributions is lower than the amount estimated, the department shall
adjust the tax credit allowed under this section.

(b)
For the purposes of using a tax credit against ad valorem taxes assessed and
levied on real property, a taxpayer shall present to the appropriate tax
collector the tax credit documentation provided to the taxpayer by the
department, and the tax collector shall apply the tax credit against such ad
valorem taxes.  The tax collector shall forward the tax credit documentation to
the department along with the amount of the tax credit applied against ad
valorem taxes, and the department shall disburse funds to the tax collector for
the amount of the tax credit applied against ad valorem taxes.  Such payments
by the department shall be made from current tax collections.

(9)  The amount of credits
that may be allocated by the department under this section for voluntary cash
contributions to any single eligible hospital during a calendar year shall not
exceed One Hundred Thousand Dollars ($100,000.00).  The aggregate amount of
credits that may be allocated by the department under this section during a
calendar year shall not exceed One Million Dollars ($1,000,000.00).  The
department shall not allocate any credits under this section after December 31,
2029.

SECTION 2.  Section 1 of this act shall be codified as
a new section in Chapter 7, Title 27, Mississippi Code of 1972.

SECTION 3.  Nothing
in this act shall affect or defeat any claim, assessment, appeal, suit, right
or cause of action for taxes due or accrued under the income tax laws,
insurance premium tax laws or ad valorem tax laws before the date on which this
act becomes effective, whether such claims, assessments, appeals, suits or
actions have been begun before the date on which this act becomes effective or
are begun thereafter; and the provisions of the income tax laws, insurance
premium tax laws and ad valorem tax laws are expressly continued in full force,
effect and operation for the purpose of the assessment, collection and
enrollment of liens for any taxes due or accrued and the execution of any
warrant under such laws before the date on which this act becomes effective,
and for the imposition of any penalties, forfeitures or claims for failure to
comply with such laws.

SECTION 4.  This act
shall take effect and be in force from and after January 1, 2026.