Income tax and ad valorem tax; authorize credit for contributions to certain hospitals.

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To: Ways and Means
MISSISSIPPI LEGISLATURE REGULAR SESSION 2026

By: Representative Yancey

HOUSE BILL NO. 989

AN ACT TO AUTHORIZE AN INCOME TAX CREDIT FOR VOLUNTARY CASH 1
CONTRIBUTIONS BY TAXPAYERS TO RURAL HOSPITALS; TO AUTHORIZE AN AD 2
VALOREM TAX CREDIT FOR VOLUNTARY CASH CONTRIBUTIONS BY INDIVIDUAL 3
TAXPAYERS TO RURAL HOSPITALS; TO LIMIT THE AMOUNT OF THE TAX 4
CREDITS; TO PROVIDE THAT UNUSED PORTIONS OF A CREDIT MAY BE 5
CARRIED FORWARD FOR FIVE CONSECUTIVE YEARS FROM THE CLOSE OF THE 6
TAX YEAR IN WHICH THE CREDIT WAS EARNED; TO PROVIDE THAT 7
CONTRIBUTIONS FOR WHICH CREDITS ARE CLAIMED UNDER THIS ACT MAY NOT 8
BE USED AS DEDUCTIONS FOR STATE TAX PURPOSES; TO PROVIDE THE 9
CRITERIA THAT A HOSPITAL MUST MEET IN ORDER FOR A CONTRIBUTION TO 10
THE HOSPITAL TO QUALIFY FOR THE CREDIT AUTHORIZED BY THIS ACT; AND 11
FOR RELATED PURPOSES. 12
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI: 13
SECTION 1. (1) For the purposes of this section, the 14
following words and phrases shall have the meanings ascribed in 15
this section unless the context clearly indicates otherwise: 16
(a) "Department" means the Department of Revenue. 17
(b) "Rural hospital" means a licensed general acute 18
care hospital that has two hundred (200) or fewer licensed beds 19
and is located in a county defined as rural by the Federal Office 20
of Rural Health Policy. 21
(c) "Voluntary cash contribution" means a cash 22
contribution made to a rural hospital by the taxpayer applying for 23
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a credit and does not include payment for or the donation of 24
merchandise, services or goods. 25
(2) (a) Except as otherwise provided in this section, a 26
credit is allowed against the taxes imposed by this chapter for 27
voluntary cash contributions made by a taxpayer during a taxable 28
year to a rural hospital. The amount of credit that may be 29
utilized by a taxpayer in a taxable year shall be limited to an 30
amount not to exceed the lesser of the amount contributed during a 31
taxable year or seventy-five percent (75%) of the total tax 32
liability of the taxpayer for the taxable year. 33
(b) An alternate credit is also allowed against ad 34
valorem taxes assessed and levied on real property for voluntary 35
cash contributions made by an individual taxpayer during the 36
taxable year to a rural hospital. The amount of credit that may 37
be utilized by a taxpayer in a taxable year shall be limited to an 38
amount not to exceed fifty percent (50%) of the total tax 39
liability of the taxpayer for ad valorem taxes assessed and levied 40
on real property. 41
(c) A husband and wife who file separate returns for a 42
taxable year in which they could have filed a joint return may 43
each claim only one-half (1/2) of the tax credit that would have 44
been allowed for a joint return. 45
(d) Any tax credit claimed under this section but not 46
used in any taxable year may be carried forward for five (5) 47
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consecutive years from the close of the taxable year in which the 48
credits were earned. 49
(e) A contribution for which a credit is claimed under 50
this section may not be used as a deduction by the taxpayer for 51
state income tax purposes. 52
(f) A taxpayer claiming a credit authorized by this 53
section shall provide the name of the rural hospital and the 54
amount of the contribution to the department on forms provided by 55
the department. 56
(g) A rural hospital shall provide the department with 57
a written certification that it meets the criteria to be 58
considered a rural hospital. The rural hospital shall also notify 59
the department of any changes that may affect eligibility under 60
this section. 61
(h) The department shall review each written 62
certification and determine whether the hospital meets the 63
criteria to be considered a rural hospital and notify the hospital 64
of its determination. The department may also periodically 65
request recertification from the hospital. The department shall 66
compile and make available to the public a list of eligible rural 67
hospitals. 68
(i) Tax credits authorized by this section that are 69
earned by a partnership, limited liability company, S corporation 70
or other similar pass-through entity, shall be allocated among all 71
partners, members or shareholders, respectively, either in 72
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proportion to their ownership interest in such entity or as the 73
partners, members or shareholders mutually agree as provided in an 74
executed document. 75
(j) A taxpayer shall apply for credits with the 76
department on forms prescribed by the department. In the 77
application the taxpayer shall certify to the department the 78
dollar amount of the contributions made or to be made during the 79
calendar year. Within thirty (30) days after the receipt of an 80
application, the department shall allocate credits based on the 81
dollar amount of contributions as certified in the application. 82
However, if the department cannot allocate the full amount of 83
credits certified in the application due to the limit on the 84
aggregate amount of credits that may be awarded under this section 85
in a calendar year, the department shall so notify the applicant 86
within thirty (30) days with the amount of credits, if any, that 87
may be allocated to the applicant in the calendar year. Once the 88
department has allocated credits to a taxpayer, if the 89
contribution for which a credit is allocated has not been made as 90
of the date of the allocation, then the contribution must be made 91
not later than sixty (60) days from the date of the allocation. 92
Documentation of the contribution must be received by the 93
department within seventy-five (75) days from the date of the 94
allocation or January 15 of the following year, whichever occurs 95
first. If the contribution is not made or the department does not 96
receive documentation of the contribution within such time period, 97
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the allocation of credit shall be cancelled and returned to the 98
department for reallocation. Upon final documentation of the 99
contributions, if the actual dollar amount of the contributions is 100
lower than the amount estimated, the department shall adjust the 101
tax credit allowed under this section. 102
(k) For the purposes of using a tax credit against ad 103
valorem taxes assessed and levied on real property, a taxpayer 104
shall present to the appropriate tax collector the tax credit 105
documentation provided to the taxpayer by the department, and the 106
tax collector shall apply the tax credit against such ad valorem 107
taxes. The tax collector shall forward the tax credit 108
documentation to the department along with the amount of the tax 109
credit applied against ad valorem taxes, and the department shall 110
disburse funds to the tax collector for the amount of the tax 111
credit applied against ad valorem taxes. Such payments by the 112
department shall be made from current tax collections. 113
(l) The aggregate amount of tax credits that may be 114
allocated by the department under this section during a calendar 115
year shall not exceed Fifteen Million Dollars ($15,000,000.00). 116
(m) The department shall not allocate any tax credits 117
under this section after December 31, 2040. 118
SECTION 2. Section 1 of this act shall be codified as a new 119
section in Chapter 7, Title 27, Mississippi Code of 1972. 120
SECTION 3. Nothing in this act shall affect or defeat any 121
claim, assessment, appeal, suit, right or cause of action for 122
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ST: Income tax and ad valorem tax; authorize
credit for contributions to certain hospitals.
taxes due or accrued under the income tax laws or ad valorem tax 123
laws before the date on which this act becomes effective, whether 124
such claims, assessments, appeals, suits or actions have been 125
begun before the date on which this act becomes effective or are 126
begun thereafter; and the provisions of the income tax laws and ad 127
valorem tax laws are expressly continued in full force, effect and 128
operation for the purpose of the assessment, collection and 129
enrollment of liens for any taxes due or accrued and the execution 130
of any warrant under such laws before the date on which this act 131
becomes effective, and for the imposition of any penalties, 132
forfeitures or claims for failure to comply with such laws. 133
SECTION 4. This act shall take effect and be in force from 134
and after January 1, 2026. 135