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To: Finance
MISSISSIPPI LEGISLATURE REGULAR SESSION 2026
By: Senator(s) Johnson
SENATE BILL NO. 2840
(As Passed the Senate)
AN ACT TO REQUIRE THE DEPARTMENT OF REVENUE TO COLLECT DATA 1
FROM EACH COUNTY SHOWING TOTAL REVENUE FROM THE INVENTORY TAX FOR 2
THE 2025 TAX YEAR; TO REQUIRE THE DEPARTMENT TO PROVIDE TO THE 3
CHAIRMEN OF THE SENATE FINANCE COMMITTEE AND THE HOUSE WAYS AND 4
MEANS COMMITTEE, NO LATER THAN DECEMBER 1, 2026, A REPORT 5
CONTAINING INFORMATION FROM THE 2025 TAX YEAR REGARDING TOTAL 6
REVENUE FROM THE INVENTORY TAX, TOTAL AMOUNT OF CREDITS CLAIMED 7
FOR INVENTORY TAX PAYMENTS, CATEGORIZED BY ENTITY TYPE, AND TOTAL 8
AMOUNT OF CREDITS ALLOCATED FOR INVENTORY TAX PAYMENTS, 9
CATEGORIZED BY ENTITY TYPE; TO BRING FORWARD SECTION 27-7-22.5, 10
MISSISSIPPI CODE OF 1972, FOR THE PURPOSE OF POSSIBLE AMENDMENT; 11
AND FOR RELATED PURPOSES. 12
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI: 13
SECTION 1. The Department of Revenue shall collect data from 14
each county showing total revenue from the inventory tax for the 15
2025 tax year. No later than December 1, 2026, the department 16
shall provide to the Chairmen of the Senate Finance Committee and 17
the House Ways and Means Committee a report containing the 18
following information: 19
(a) The total amount of revenue received by all 20
counties in the state from the inventory tax in 2025; 21
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(b) The total amount of credits claimed under Section 22
27-7-22.5, Mississippi Code of 1972, for inventory taxes paid in 23
2025, categorized by entity type; and 24
(c) The total amount of credits allocated under Section 25
27-7-22.5, Mississippi Code of 1972, for inventory taxes paid in 26
2025, categorized by entity type. 27
SECTION 2. Section 27-7-22.5, Mississippi Code of 1972, is 28
brought forward as follows: 29
27-7-22.5. (1) (a) For any manufacturer, distributor, 30
wholesale or retail merchant who pays to a county, municipality, 31
school district, levee district or any other taxing authority of 32
the state or a political subdivision thereof, ad valorem taxes 33
imposed on commodities, raw materials, works-in-process, products, 34
goods, wares and merchandise held for resale, a credit against the 35
income taxes imposed under this chapter shall be allowed for the 36
portion of the ad valorem taxes so paid in the amounts prescribed 37
in subsection (2). 38
(b) (i) For any person, firm or corporation who pays 39
to a county, municipality, school district, levee district or any 40
other taxing authority of the state or a political subdivision 41
thereof, ad valorem taxes imposed on rental equipment, a credit 42
against the income taxes imposed under this chapter shall be 43
allowed for the portion of the ad valorem taxes so paid in the 44
amounts prescribed in subsection (2). 45
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(ii) As used in this paragraph, "rental equipment" 46
means any rental equipment or other rental items which are held 47
for short-term rental to the public: 48
1. Under rental agreements with no specific 49
term; 50
2. Under at-will or open-ended agreements; or 51
3. Under rental agreements with terms 52
ordinarily of less than three hundred sixty-five (365) days; and 53
4. Is not subject to privilege taxes imposed 54
in Chapter 19, Title 27, Mississippi Code of 1972. 55
(c) The tax credit allowed by this section may not be 56
claimed by a taxpayer that is a medical cannabis establishment as 57
defined in the Mississippi Medical Cannabis Act. 58
(2) The tax credit allowed by this section shall not exceed 59
the amounts set forth in paragraphs (a) through (g) of this 60
subsection; and may be claimed for each location where such 61
commodities, raw material, works-in-process, products, goods, 62
wares, merchandise and/or rental equipment are found and upon 63
which the ad valorem taxes have been paid. Any tax credit claimed 64
under this section but not used in any taxable year may be carried 65
forward for five (5) consecutive years from the close of the tax 66
year in which the credit was earned. 67
(a) For the 1994 taxable year, the tax credit for each 68
location of the taxpayer shall not exceed the lesser of Two 69
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Thousand Dollars ($2,000.00) or the amount of income taxes due the 70
State of Mississippi that are attributable to such location. 71
(b) For the 1995 taxable year, the tax credit for each 72
location of the taxpayer shall not exceed the lesser of Three 73
Thousand Dollars ($3,000.00) or the amount of income taxes due the 74
State of Mississippi that are attributable to such location. 75
(c) For the 1996 taxable year, the tax credit for each 76
location of the taxpayer shall not exceed the lesser of Four 77
Thousand Dollars ($4,000.00) or the amount of income taxes due the 78
State of Mississippi that are attributable to such location. 79
(d) For the 1997 taxable year and each taxable year 80
thereafter through taxable year 2013, the tax credit for each 81
location of the taxpayer shall not exceed the lesser of Five 82
Thousand Dollars ($5,000.00) or the amount of income taxes due the 83
State of Mississippi that are attributable to such location. 84
(e) For the 2014 taxable year, the tax credit for each 85
location of the taxpayer shall not exceed the lesser of Ten 86
Thousand Dollars ($10,000.00) or the amount of income taxes due 87
the State of Mississippi that are attributable to such location. 88
(f) For the 2015 taxable year, the tax credit for each 89
location of the taxpayer shall not exceed the lesser of Fifteen 90
Thousand Dollars ($15,000.00) or the amount of income taxes due 91
the State of Mississippi that are attributable to such location. 92
(g) For the 2016 taxable year and each taxable year 93
thereafter, the tax credit of the taxpayer shall be the lesser of 94
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ST: Inventory tax; require Department of
Revenue to provide report containing certain
2025 information regarding.
the amount of the ad valorem taxes described in subsection (1) 95
paid or the amount of income taxes due the State of Mississippi 96
that are attributable to such location. 97
(3) Any amount of ad valorem taxes paid by a taxpayer that 98
is applied toward the tax credit allowed in this section may not 99
be used as a deduction by the taxpayer for state income tax 100
purposes. In the case of a taxpayer that is a partnership, 101
limited liability company or S corporation, the credit may be 102
applied only to the tax attributable to partnership, limited 103
liability company or S corporation income derived from the 104
taxpayer. 105
(4) Any amount of ad valorem taxes applied and used as a tax 106
credit under Section 27-31-19.1 may not be applied and used as a 107
tax credit under this section. 108
SECTION 3. This act shall take effect and be in force from 109
and after July 1, 2026, and shall stand repealed on June 30, 2026. 110