Tax credits; authorize for contributions by certain taxpayers to certain hospitals.

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To: Ways and Means
MISSISSIPPI LEGISLATURE REGULAR SESSION 2026

By: Representative Lamar

HOUSE BILL NO. 4032

AN ACT TO AUTHORIZE AN INCOME TAX CREDIT, INSURANCE PREMIUM 1
TAX CREDIT AND AD VALOREM TAX CREDIT FOR VOLUNTARY CASH 2
CONTRIBUTIONS BY CERTAIN TAXPAYERS TO CERTAIN ELIGIBLE HOSPITALS; 3
TO PROVIDE THE CRITERIA THAT A HOSPITAL MUST MEET IN ORDER FOR A 4
CONTRIBUTION TO THE HOSPITAL TO QUALIFY FOR THE TAX CREDIT 5
AUTHORIZED BY THIS ACT; TO LIMIT THE AMOUNT OF THE CREDIT; TO 6
PROVIDE THAT UNUSED PORTIONS OF A CREDIT MAY BE CARRIED FORWARD 7
FOR FIVE CONSECUTIVE YEARS FROM THE CLOSE OF THE TAX YEAR IN WHICH 8
THE CREDIT WAS EARNED; AND FOR RELATED PURPOSES. 9
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI: 10
SECTION 1. (1) For the purposes of this section, the 11
following words and phrases shall have the meanings ascribed in 12
this subsection unless the context clearly indicates otherwise: 13
(a) "Department" means the Department of Revenue. 14
(b) "Eligible hospital" means licensed Mississippi 15
hospitals that provide short term acute care services, Critical 16
Access Hospitals and other hospitals that have forty-nine (49) or 17
fewer licensed inpatient beds and have an Emergency Department 18
that provides emergency services twenty-four (24) hours a day for 19
each day of a week. The term "eligible hospital" does not include 20
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hospitals that are owned by the State of Mississippi or the 21
federal government. 22
In addition, in order to be an "eligible hospital", a 23
hospital must engage, or have already engaged, a healthcare 24
consulting firm with expertise and experience in operational and 25
financial optimization of hospitals in the State of Mississippi. 26
The consulting firm will advise and assist in developing an 27
initial strategic plan for the hospital and in updating the 28
strategic plan on at least an annual basis. As part of their 29
engagement, the consulting firm will work with hospital leadership 30
and provide input in helping to identify new service offering 31
opportunities, improve or optimize existing service offerings, and 32
to help identify opportunities for efficiency improvements and 33
cost savings. A hospital also must engage or have already engaged 34
a Certified Public Accountant (CPA) firm with expertise in 35
healthcare and hospital reimbursement and cost reporting. The CPA 36
firm will provide ongoing assistance in the form of reimbursement 37
and cost reporting advisory services and assistance with 38
preparation and filing of annual cost reports. A hospital must 39
have a qualified CPA firm engaged for these services prior to 40
qualifying as an eligible hospital. 41
(2) (a) The tax credit authorized in this section shall be 42
available only to a taxpayer who is a business enterprise engaged 43
in commercial, industrial or professional activities and operating 44
as a corporation, limited liability company, partnership or sole 45
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proprietorship. Except as otherwise provided in this section, a 46
credit is allowed against the taxes imposed by Sections 27-7-5, 47
27-15-103, 27-15-109 and 27-15-123, for voluntary cash 48
contributions made by a taxpayer during the taxable year to an 49
eligible hospital. A credit is also allowed against ad valorem 50
taxes assessed and levied on real property for voluntary cash 51
contributions made by the taxpayer during the taxable year to an 52
eligible hospital. The amount of credit that may be utilized by a 53
taxpayer in a taxable year shall be limited to (i) an amount not 54
to exceed fifty percent (50%) of the total tax liability of the 55
taxpayer for the taxes imposed by such sections of law and (ii) an 56
amount not to exceed fifty percent (50%) of the total tax 57
liability of the taxpayer for ad valorem taxes assessed and levied 58
on real property. Subject to such limitation on the amount of 59
credit that a taxpayer may utilize in a taxable year, a taxpayer 60
who is allocated a tax credit under this subsection during a 61
calendar year may utilize the credit against the taxes imposed by 62
Sections 27-7-5, 27-15-103, 27-15-109 and 27-15-123 for the 63
immediately preceding taxable year, provided that the taxpayer has 64
not already filed an annual return for such taxes. Any tax credit 65
claimed under this section but not used in any taxable year may be 66
carried forward for five (5) consecutive years from the close of 67
the tax year in which the credits were earned. 68
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(b) A contribution for which a credit is claimed under 69
this section may not be used as a deduction by the taxpayer for 70
state income tax purposes. 71
(3) A taxpayer taking a credit authorized by this section 72
shall provide the name of the eligible hospital and the amount of 73
the contribution to the department on forms provided by the 74
department. 75
(4) To be considered an eligible hospital, a hospital shall 76
provide the department with a written certification that it meets 77
all criteria to be considered an eligible hospital. The hospital 78
shall also notify the department of any changes that may affect 79
eligibility under this section. 80
(5) The eligible hospital's written certification must be 81
signed by an officer of the hospital under penalty of perjury. 82
The written certification shall include the following: 83
(a) Verification that the hospital meets the definition 84
of eligible hospital under subsection (1)(b) of this section; and 85
(b) Any other information that the department requires 86
to administer this section. 87
(6) The department shall review each written certification 88
and determine whether the hospital meets all the criteria to be 89
considered an eligible hospital and notify the hospital of its 90
determination. The department may also periodically request 91
recertification from the hospital. The department shall compile 92
and make available to the public a list of eligible hospitals. 93
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(7) Tax credits authorized by this section that are earned 94
by a partnership, limited liability company, S corporation or 95
other similar pass-through entity, shall be allocated among all 96
partners, members or shareholders, respectively, either in 97
proportion to their ownership interest in such entity or as the 98
partners, members or shareholders mutually agree as provided in an 99
executed document. 100
(8) (a) A taxpayer shall apply for credits with the 101
department on forms prescribed by the department. In the 102
application the taxpayer shall certify to the department the 103
dollar amount of the contributions made or to be made during the 104
calendar year. Within thirty (30) days after the receipt of an 105
application, the department shall allocate credits based on the 106
dollar amount of contributions as certified in the application. 107
However, if the department cannot allocate the full amount of 108
credits certified in the application due to the limit on the 109
aggregate amount of credits that may be awarded under this section 110
in a calendar year, the department shall so notify the applicant 111
within thirty (30) days with the amount of credits, if any, that 112
may be allocated to the applicant in the calendar year. Once the 113
department has allocated credits to a taxpayer, if the 114
contribution for which a credit is allocated has not been made as 115
of the date of the allocation, then the contribution must be made 116
not later than sixty (60) days from the date of the allocation. 117
If the contribution is not made within such time period, the 118
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allocation shall be cancelled and returned to the department for 119
reallocation. Upon final documentation of the contributions, if 120
the actual dollar amount of the contributions is lower than the 121
amount estimated, the department shall adjust the tax credit 122
allowed under this section. 123
(b) For the purposes of using a tax credit against ad 124
valorem taxes assessed and levied on real property, a taxpayer 125
shall present to the appropriate tax collector the tax credit 126
documentation provided to the taxpayer by the Department of 127
Revenue, and the tax collector shall apply the tax credit against 128
such ad valorem taxes. The tax collector shall forward the tax 129
credit documentation to the Department of Revenue along with the 130
amount of the tax credit applied against ad valorem taxes, and the 131
department shall disburse funds to the tax collector for the 132
amount of the tax credit applied against ad valorem taxes. Such 133
payments by the Department of Revenue shall be made from current 134
tax collections. 135
(9) For calendar year 2026, the aggregate amount of tax 136
credits that may be allocated by the department under this section 137
during the calendar year shall not exceed Eighteen Million Dollars 138
($18,000,000.00); for calendar year 2027, the aggregate amount of 139
tax credits that may be allocated by the department under this 140
section during the calendar year shall not exceed Twenty-four 141
Million Dollars ($24,000,000.00); and for calendar year 2028, and 142
for each calendar year thereafter, the aggregate amount of tax 143
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credits that may be allocated by the department under this section 144
during a calendar year shall not exceed Thirty Million Dollars 145
($30,000,000.00). For calendar year 2026, for credits allocated 146
during the calendar year for contributions to eligible hospitals, 147
no more than Three Hundred Thousand Dollars ($300,000.00) of such 148
credits may be allocated for contributions to a single eligible 149
hospital for the same calendar year. For calendar year 2027, for 150
credits allocated during the calendar year for contributions to 151
eligible hospitals, no more than Four Hundred Thousand Dollars 152
($400,000.00) of such credits may be allocated for contributions 153
to a single eligible hospital for the same calendar year. For 154
calendar year 2028, and for each calendar year thereafter, for 155
credits allocated during the calendar year for contributions to 156
eligible hospitals, no more than Five Hundred Thousand Dollars 157
($500,000.00) of such credits may be allocated for contributions 158
to a single eligible hospital for same calendar year. 159
SECTION 2. Section 1 of this act shall be codified as a new 160
section in Chapter 7, Title 27, Mississippi Code of 1972. 161
SECTION 3. Nothing in this act shall affect or defeat any 162
claim, assessment, appeal, suit, right or cause of action for 163
taxes due or accrued under the income tax laws, insurance premium 164
tax laws or ad valorem tax laws before the date on which this act 165
becomes effective, whether such claims, assessments, appeals, 166
suits or actions have been begun before the date on which this act 167
becomes effective or are begun thereafter; and the provisions of 168
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ST: Tax credits; authorize for contributions by
certain taxpayers to certain hospitals.
the income tax laws, insurance premium tax laws and ad valorem tax 169
laws are expressly continued in full force, effect and operation 170
for the purpose of the assessment, collection and enrollment of 171
liens for any taxes due or accrued and the execution of any 172
warrant under such laws before the date on which this act becomes 173
effective, and for the imposition of any penalties, forfeitures or 174
claims for failure to comply with such laws. 175
SECTION 4. This act shall take effect and be in force from 176
and after January 1, 2026. 177