Income tax credit; revise definition of "eligible charitable organization."

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To: Finance
MISSISSIPPI LEGISLATURE REGULAR SESSION 2026

By: Senator(s) Boyd, Whaley, Suber

SENATE BILL NO. 2851

AN ACT TO AMEND SECTION 27-7-22.48, MISSISSIPPI CODE OF 1972, 1
TO REVISE THE DEFINITION OF "ELIGIBLE CHARITABLE ORGANIZATION," 2
FOR PURPOSES OF AN INDIVIDUAL AND BUSINESS INCOME TAX CREDIT, TO 3
INCLUDE A 501(C)(3) ORGANIZATION THAT RAISES FUNDS FOR QUALIFIED 4
TUITION PROGRAMS UNDER SECTION 529 OF THE INTERNAL REVENUE CODE 5
FOR THE CHILDREN OF EMPLOYEES OF A MISSISSIPPI COUNTY SHERIFF'S 6
DEPARTMENT OR MUNICIPAL POLICE DEPARTMENT; AND FOR RELATED 7
PURPOSES. 8
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI: 9
SECTION 1. Section 27-7-22.48, Mississippi Code of 1972, is 10
amended as follows: 11
27-7-22.48. (1) (a) For the purposes of this section, the 12
following words and phrases shall have the meanings ascribed in 13
this section unless the context clearly indicates otherwise: 14
(i) "Department" means the Department of Revenue. 15
(ii) "Eligible charitable organization" means an 16
organization that is exempt from federal income taxation under 17
Section 501(c)(3) of the Internal Revenue Code and: 18
1. Spends at least fifty percent (50%) of its 19
budget on contracting or making other agreements or arrangements 20
with physicians and/or nurse practitioners to provide health care 21
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services to low-income residents of this state, including those 22
who are mothers and to their households; or 23
2. Raises funds for qualified tuition 24
programs under Section 529 of the Internal Revenue Code for the 25
children of employees of a Mississippi county sheriff's department 26
or municipal police department. 27
"Eligible charitable organization" does not include any 28
entity that provides, pays for or provides coverage of abortions 29
or that financially supports any other entity that provides, pays 30
for or provides coverage of abortions. 31
(iii) "Low-income residents" means persons whose 32
household income does not exceed one hundred eighty-five percent 33
(185%) of the federal poverty level converted to a modified 34
adjusted gross income equivalent standard. 35
(iv) "Nurse practitioner" means a nurse 36
practitioner certified under Section 73-15-20, Mississippi Code of 37
1972. 38
(v) "Physician" means an individual licensed to 39
practice medicine or osteopathic medicine under Section 73-25-1 et 40
seq., Mississippi Code of 1972. 41
(2) (a) (i) The tax credit authorized in this subsection 42
shall be available only to a taxpayer who is a business enterprise 43
engaged in commercial, industrial or professional activities and 44
operating as a corporation, limited liability company, partnership 45
or sole proprietorship. Except as otherwise provided in this 46
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subsection, a credit is allowed against the taxes imposed by 47
Sections 27-7-5, 27-15-103, 27-15-109 and 27-15-123, for voluntary 48
cash contributions made by a taxpayer during the taxable year to 49
an eligible charitable organization. A credit is also allowed 50
against ad valorem taxes assessed and levied on real property for 51
voluntary cash contributions made by the taxpayer during the 52
taxable year to an eligible charitable organization. The amount 53
of credit that may be utilized by a taxpayer in a taxable year 54
shall be limited to an amount not to exceed fifty percent (50%) of 55
the total tax liability of the taxpayer for the taxes imposed by 56
such sections of law and an amount not to exceed fifty percent 57
(50%) of the total tax liability of the taxpayer for ad valorem 58
taxes assessed and levied on real property. Any tax credit 59
claimed under this subsection but not used in any taxable year may 60
be carried forward for five (5) consecutive years from the close 61
of the tax year in which the credits were earned. 62
(ii) A contribution to an eligible charitable 63
organization for which a credit is claimed under this subsection 64
does not qualify for and shall not be included in any credit that 65
may be claimed under subsection (3) of this section. 66
(iii) A contribution for which a credit is claimed 67
under this subsection may not be used as a deduction by the 68
taxpayer for state income tax purposes. 69
(b) Taxpayers taking a credit authorized by this 70
subsection shall provide the name of the eligible charitable 71
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organization and the amount of the contribution to the department 72
on forms provided by the department. 73
(c) An eligible charitable organization shall provide 74
the department with a written certification that it meets all 75
criteria to be considered an eligible charitable organization. 76
The organization shall also notify the department of any changes 77
that may affect eligibility under this subsection. 78
(d) The eligible charitable organization's written 79
certification must be signed by an officer of the organization 80
under penalty of perjury. The written certification shall include 81
the following: 82
(i) Verification of the organization's status 83
under Section 501(c)(3) of the Internal Revenue Code; 84
(ii) A statement that the organization does not 85
provide, pay for or provide coverage of abortions and does not 86
financially support any other entity that provides, pays for or 87
provides coverage of abortions; 88
(iii) Any other information that the department 89
requires to administer this subsection. 90
(e) The department shall review each written 91
certification and determine whether the organization meets all the 92
criteria to be considered an eligible charitable organization and 93
notify the organization of its determination. The department may 94
also periodically request recertification from the organization. 95
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The department shall compile and make available to the public a 96
list of eligible charitable organizations. 97
(f) Tax credits authorized by this subsection that are 98
earned by a partnership, limited liability company, S corporation 99
or other similar pass-through entity, shall be allocated among all 100
partners, members or shareholders, respectively, either in 101
proportion to their ownership interest in such entity or as the 102
partners, members or shareholders mutually agree as provided in an 103
executed document. 104
(g) (i) A taxpayer shall apply for credits with the 105
department on forms prescribed by the department. In the 106
application the taxpayer shall certify to the department the 107
dollar amount of the contributions made or to be made during the 108
calendar year. Within thirty (30) days after the receipt of an 109
application, the department shall allocate credits based on the 110
dollar amount of contributions as certified in the application. 111
However, if the department cannot allocate the full amount of 112
credits certified in the application due to the limit on the 113
aggregate amount of credits that may be awarded under this 114
subsection in a calendar year, the department shall so notify the 115
applicant within thirty (30) days with the amount of credits, if 116
any, that may be allocated to the applicant in the calendar year. 117
Once the department has allocated credits to a taxpayer, if the 118
contribution for which a credit is allocated has not been made as 119
of the date of the allocation, then the contribution must be made 120
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not later than sixty (60) days from the date of the allocation. 121
If the contribution is not made within such time period, the 122
allocation shall be cancelled and returned to the department for 123
reallocation. Upon final documentation of the contributions, if 124
the actual dollar amount of the contributions is lower than the 125
amount estimated, the department shall adjust the tax credit 126
allowed under this subsection. 127
(ii) For the purposes of using a tax credit 128
against ad valorem taxes assessed and levied on real property, a 129
taxpayer shall present to the appropriate tax collector the tax 130
credit documentation provided to the taxpayer by the Department of 131
Revenue, and the tax collector shall apply the tax credit against 132
such ad valorem taxes. The tax collector shall forward the tax 133
credit documentation to the Department of Revenue along with the 134
amount of the tax credit applied against ad valorem taxes, and the 135
department shall disburse funds to the tax collector for the 136
amount of the tax credit applied against ad valorem taxes. Such 137
payments by the Department of Revenue shall be made from current 138
tax collections. 139
(h) The aggregate amount of tax credits that may be 140
allocated by the department under this subsection during a 141
calendar year shall not exceed Three Million Dollars 142
($3,000,000.00). 143
(3) (a) (i) Except as otherwise provided in this 144
subsection, a credit is allowed against the taxes imposed by this 145
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chapter for voluntary cash contributions by an individual taxpayer 146
during the taxable year to an eligible charitable organization. A 147
credit is also allowed against ad valorem taxes assessed and 148
levied on real property for voluntary cash contributions made by 149
the taxpayer during the taxable year to an eligible charitable 150
organization. The amount of credit that may be utilized by a 151
taxpayer in a taxable year shall be limited to an amount not to 152
exceed fifty percent (50%) of the total tax liability of the 153
taxpayer for the taxes imposed by this chapter and an amount not 154
to exceed fifty percent (50%) of the total tax liability of the 155
taxpayer for ad valorem taxes assessed and levied on real 156
property. Any tax credit claimed under this subsection but not 157
used in any taxable year may be carried forward for five (5) 158
consecutive years from the close of the tax year in which the 159
credits were earned. 160
(ii) A husband and wife who file separate returns 161
for a taxable year in which they could have filed a joint return 162
may each claim only one-half (1/2) of the tax credit that would 163
have been allowed for a joint return. 164
(iii) A contribution to an eligible charitable 165
organization for which a credit is claimed under this subsection 166
does not qualify for and shall not be included in any credit that 167
may be claimed under subsection (2) of this section. 168
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(iv) A contribution for which a credit is claimed 169
under this subsection may not be used as a deduction by the 170
taxpayer for state income tax purposes. 171
(b) Taxpayers taking a credit authorized by this 172
subsection shall provide the name of the eligible charitable 173
organization and the amount of the contribution to the department 174
on forms provided by the department. 175
(c) An eligible charitable organization shall provide 176
the department with a written certification that it meets all 177
criteria to be considered an eligible charitable organization. 178
The organization shall also notify the department of any changes 179
that may affect eligibility under this subsection. 180
(d) The eligible charitable organization's written 181
certification must be signed by an officer of the organization 182
under penalty of perjury. The written certification shall include 183
the following: 184
(i) Verification of the organization's status 185
under Section 501(c)(3) of the Internal Revenue Code; 186
(ii) A statement that the organization does not 187
provide, pay for or provide coverage of abortions and does not 188
financially support any other entity that provides, pays for or 189
provides coverage of abortions; 190
(iii) Any other information that the department 191
requires to administer this subsection. 192
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(e) The department shall review each written 193
certification and determine whether the organization meets all the 194
criteria to be considered an eligible charitable organization and 195
notify the organization of its determination. The department may 196
also periodically request recertification from the organization. 197
The department shall compile and make available to the public a 198
list of eligible charitable organizations. 199
(f) (i) A taxpayer shall apply for credits with the 200
department on forms prescribed by the department. In the 201
application the taxpayer shall certify to the department the 202
dollar amount of the contributions made or to be made during the 203
calendar year. Within thirty (30) days after the receipt of an 204
application, the department shall allocate credits based on the 205
dollar amount of contributions as certified in the application. 206
However, if the department cannot allocate the full amount of 207
credits certified in the application due to the limit on the 208
aggregate amount of credits that may be awarded under this 209
subsection in a calendar year, the department shall so notify the 210
applicant within thirty (30) days with the amount of credits, if 211
any, that may be allocated to the applicant in the calendar year. 212
Once the department has allocated credits to a taxpayer, if the 213
contribution for which a credit is allocated has not been made as 214
of the date of the allocation, then the contribution must be made 215
not later than sixty (60) days from the date of the allocation. 216
If the contribution is not made within such time period, the 217
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ST: Income tax credit; revise definition of
"eligible charitable organization."
allocation shall be cancelled and returned to the department for 218
reallocation. Upon final documentation of the contributions, if 219
the actual dollar amount of the contributions is lower than the 220
amount estimated, the department shall adjust the tax credit 221
allowed under this subsection. 222
(ii) For the purposes of using a tax credit 223
against ad valorem taxes assessed and levied on real property, a 224
taxpayer shall present to the appropriate tax collector the tax 225
credit documentation provided to the taxpayer by the Department of 226
Revenue, and the tax collector shall apply the tax credit against 227
such ad valorem taxes. The tax collector shall forward the tax 228
credit documentation to the Department of Revenue along with the 229
amount of the tax credit applied against ad valorem taxes, and the 230
department shall disburse funds to the tax collector for the 231
amount of the tax credit applied against ad valorem taxes. Such 232
payments by the Department of Revenue shall be made from current 233
tax collections. 234
(g) The aggregate amount of tax credits that may be 235
allocated by the department under this subsection during a 236
calendar year shall not exceed One Million Dollars 237
($1,000,000.00). 238
SECTION 2. This act shall take effect and be in force from 239
and after January 1, 2026. 240