Income tax; authorize a credit for contributions to certain charitable organizations.

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To: Finance
MISSISSIPPI LEGISLATURE REGULAR SESSION 2026

By: Senator(s) Taylor

SENATE BILL NO. 2866

AN ACT TO AUTHORIZE AN INCOME TAX CREDIT FOR VOLUNTARY CASH 1
CONTRIBUTIONS BY TAXPAYERS TO QUALIFYING CHARITABLE ORGANIZATIONS; 2
TO LIMIT THE AMOUNT OF THE TAX CREDIT; TO PROVIDE THAT UNUSED 3
PORTIONS OF A TAX CREDIT MAY BE CARRIED FORWARD FOR FIVE 4
CONSECUTIVE YEARS FROM THE CLOSE OF THE TAX YEAR IN WHICH THE 5
CREDIT WAS EARNED; TO PROVIDE THE CRITERIA THAT A QUALIFYING 6
CHARITABLE ORGANIZATION MUST MEET IN ORDER FOR A CONTRIBUTION TO 7
THE ORGANIZATION TO QUALIFY FOR A TAX CREDIT AUTHORIZED BY THIS 8
ACT; 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) "Qualifying charitable organization" means a 15
charitable organization that (i) is exempt from federal income 16
taxation under Section 501(c)(3) of the Internal Revenue Code and 17
(ii) each operating year provides services to at least fifteen 18
(15) qualified individuals in this state and spends at least fifty 19
percent (50%) of its budget on services to qualified individuals 20
in this state. A charitable organization that is exempt from 21
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federal income tax under Section 501(c)(3) of the Internal Revenue 22
Code and that meets all other requirements of this paragraph 23
except that it does not spend at least fifty percent (50%) of its 24
overall budget in Mississippi may be a qualifying charitable 25
organization if it spends at least fifty percent (50%) of its 26
Mississippi budget on services to qualified individuals in 27
Mississippi and it certifies to the department that one hundred 28
percent (100%) of the voluntary cash contributions from the 29
taxpayer will be spent on services to qualified individuals in 30
Mississippi. 31
(c) "Qualified individual" means an adult or child with 32
diagnosed intellectual, developmental and/or physical disabilities 33
who is unable to live independently or be left unsupervised due to 34
their condition, and who receives daytime or full-time care from a 35
nonprofit organization that is not funded through Medicaid or 36
Medicare and is not a mental health care provider or a public or 37
private school. 38
(d) "Services" means: 39
(i) Supervised daytime shelter and life-skills 40
enrichment for adults with disabilities; 41
(ii) Medical-related assistance through access to 42
equipment and community resources; and/or 43
(iii) Support and referral services to families 44
facing financial hardship. 45
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(2) (a) (i) Except as otherwise provided in this 46
subsection, a credit is allowed against the taxes imposed by this 47
chapter for voluntary cash contributions by an individual taxpayer 48
during the taxable year to a qualifying charitable organization. 49
The amount of credit that may be utilized by a taxpayer in a 50
taxable year shall be limited to an amount not to exceed fifty 51
percent (50%) of the total tax liability of the taxpayer for the 52
taxes imposed by this chapter. Any tax credit claimed under this 53
subsection but not used in any taxable year may be carried forward 54
for five (5) consecutive years from the close of the tax year in 55
which the credits were earned. 56
(ii) A husband and wife who file separate returns 57
for a taxable year in which they could have filed a joint return 58
may each claim only one-half (1/2) of the tax credit that would 59
have been allowed for a joint return. 60
(iii) A contribution to a qualifying charitable 61
organization for which a credit is claimed under this subsection 62
does not qualify for and shall not be included in any credit that 63
may be claimed under subsection (3) of this subsection. 64
(iv) A contribution for which a credit is claimed 65
under this subsection may not be used as a deduction by the 66
taxpayer for state income tax purposes. 67
(b) Taxpayers taking a credit authorized by this 68
subsection shall provide the name of the qualifying charitable 69
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organization and the amount of the contribution to the department 70
on forms provided by the department. 71
(c) A qualifying charitable organization shall provide 72
the department with a written certification that it meets all 73
criteria to be considered a qualifying charitable organization. 74
The organization shall also notify the department of any changes 75
that may affect the qualifications under this subsection. 76
(d) The charitable organization's written certification 77
must be signed by an officer of the organization under penalty of 78
perjury. The written certification shall include the following: 79
(i) Verification of the organization's status 80
under Section 501(c)(3) of the Internal Revenue Code. 81
(ii) Financial data indicating the organization's 82
budget for the organization's prior operating year and the amount 83
of that budget spent on services to residents of this state who 84
are qualified individuals. 85
(iii) A statement that the organization plans to 86
continue spending at least fifty percent (50%) of its budget on 87
services to residents of this state who are qualified individuals. 88
A charitable organization that is exempt from federal income tax 89
under Section 501(c)(3) of the Internal Revenue Code and that 90
meets all other requirements for a qualifying charitable 91
organization except that it does not spend at least fifty percent 92
(50%) of its overall budget in Mississippi shall submit a 93
statement that it spends at least fifty percent (50%) of its 94
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Mississippi budget on services to qualified individuals in 95
Mississippi and that one hundred percent (100%) of the voluntary 96
cash contributions it receives from Mississippi taxpayers will be 97
spent on services to qualified individuals in Mississippi. 98
(iv) A statement that each operating year it 99
provides services to at least fifteen (15) qualified individuals 100
in this state. 101
(v) A statement that the organization does not 102
provide, pay for or provide coverage of abortions and does not 103
financially support any other entity that provides, pays for or 104
provides coverage of abortions. 105
(vi) Any other information that the department 106
requires to administer this subsection. 107
(e) The department shall review each written 108
certification and determine whether the organization meets all the 109
criteria to be considered a qualifying charitable organization and 110
notify the organization of its determination. The department may 111
also periodically request recertification from the organization. 112
The department shall compile and make available to the public a 113
list of the qualifying charitable organizations. 114
(f) A taxpayer shall apply for credits with the 115
department on forms prescribed by the department. In the 116
application the taxpayer shall certify to the department the 117
dollar amount of the contributions made or to be made during the 118
calendar year. Within thirty (30) days after the receipt of an 119
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application, the department shall allocate credits based on the 120
dollar amount of contributions as certified in the application. 121
However, if the department cannot allocate the full amount of 122
credits certified in the application due to the limit on the 123
aggregate amount of credits that may be awarded under this 124
subsection in a calendar year, the department shall so notify the 125
applicant within thirty (30) days with the amount of credits, if 126
any, that may be allocated to the applicant in the calendar year. 127
Once the department has allocated credits to a taxpayer, if the 128
contribution for which a credit is allocated has not been made as 129
of the date of the allocation, then the contribution must be made 130
not later than sixty (60) days from the date of the allocation. 131
If the contribution is not made within such time period, the 132
allocation shall be cancelled and returned to the department for 133
reallocation. Upon final documentation of the contributions, if 134
the actual dollar amount of the contributions is lower than the 135
amount estimated, the department shall adjust the tax credit 136
allowed under this subsection. 137
(g) The aggregate amount of tax credits that may be 138
allocated under this subsection in any calendar year shall not 139
exceed Five Hundred Thousand Dollars ($500,000.00). 140
(3) (a) (i) The tax credit authorized in this subsection 141
shall be available only to a taxpayer who is a business enterprise 142
engaged in commercial, industrial or professional activities and 143
operating as a corporation, limited liability company, partnership 144
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or sole proprietorship. Except as otherwise provided in this 145
subsection, a credit is allowed against the taxes imposed by this 146
chapter for voluntary cash contributions made by a taxpayer during 147
the taxable year to a qualifying charitable organization. The 148
amount of credit that may be utilized by a taxpayer in a taxable 149
year shall be limited to an amount not to exceed fifty percent 150
(50%) of the total tax liability of the taxpayer for the taxes 151
imposed by this chapter. Any tax credit claimed under this 152
subsection but not used in any taxable year may be carried forward 153
for five (5) consecutive years from the close of the tax year in 154
which the credits were earned. 155
(ii) A contribution to a qualifying charitable 156
organization for which a credit is claimed under this subsection 157
does not qualify for and shall not be included in any credit that 158
may be claimed under subsection (2) of this section. 159
(iii) A contribution for which a credit is claimed 160
under this subsection may not be used as a deduction by the 161
taxpayer for state income tax purposes. 162
(b) Taxpayers taking a credit authorized by this 163
subsection shall provide the name of the qualifying charitable 164
organization and the amount of the contribution to the department 165
on forms provided by the department. 166
(c) A qualifying charitable organization shall provide 167
the department with a written certification that it meets all 168
criteria to be considered a qualifying charitable organization. 169
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The organization shall also notify the department of any changes 170
that may affect the qualifications under this subsection. 171
(d) The charitable organization's written certification 172
must be signed by an officer of the organization under penalty of 173
perjury. The written certification shall include the following: 174
(i) Verification of the organization's status 175
under Section 501(c)(3) of the Internal Revenue Code. 176
(ii) Financial data indicating the organization's 177
budget for the organization's prior operating year and the amount 178
of that budget spent on services to residents of this state who 179
are qualified individuals. 180
(iii) A statement that the organization plans to 181
continue spending at least fifty percent (50%) of its budget on 182
services to residents of this state who are qualified individuals. 183
A charitable organization that is exempt from federal income tax 184
under Section 501(c)(3) of the Internal Revenue Code and that 185
meets all other requirements for a qualifying charitable 186
organization except that it does not spend at least fifty percent 187
(50%) of its overall budget in Mississippi shall submit a 188
statement that it spends at least fifty percent (50%) of its 189
Mississippi budget on services to qualified individuals in 190
Mississippi and that one hundred percent (100%) of the voluntary 191
cash contributions it receives from Mississippi taxpayers will be 192
spent on services to qualified individuals in Mississippi. 193
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(iv) A statement that each operating year it 194
provides services to at least fifteen (15) qualified individuals 195
in this state. 196
(v) A statement that the organization does not 197
provide, pay for or provide coverage of abortions and does not 198
financially support any other entity that provides, pays for or 199
provides coverage of abortions. 200
(vi) Any other information that the department 201
requires to administer this subsection. 202
(e) The department shall review each written 203
certification and determine whether the organization meets all the 204
criteria to be considered a qualifying charitable organization and 205
notify the organization of its determination. The department may 206
also periodically request recertification from the organization. 207
The department shall compile and make available to the public a 208
list of the qualifying charitable organizations. 209
(f) Tax credits authorized by this subsection that are 210
earned by a partnership, limited liability company, S corporation 211
or other similar pass-through entity, shall be allocated among all 212
partners, members or shareholders, respectively, either in 213
proportion to their ownership interest in such entity or as the 214
partners, members or shareholders mutually agree as provided in an 215
executed document. 216
(g) A taxpayer shall apply for credits with the 217
department on forms prescribed by the department. In the 218
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application the taxpayer shall certify to the department the 219
dollar amount of the contributions made or to be made during the 220
calendar year. Within thirty (30) days after the receipt of an 221
application, the department shall allocate credits based on the 222
dollar amount of contributions as certified in the application. 223
However, if the department cannot allocate the full amount of 224
credits certified in the application due to the limit on the 225
aggregate amount of credits that may be awarded under this 226
subsection in a calendar year, the department shall so notify the 227
applicant within thirty (30) days with the amount of credits, if 228
any, that may be allocated to the applicant in the calendar year. 229
Once the department has allocated credits to a taxpayer, if the 230
contribution for which a credit is allocated has not been made as 231
of the date of the allocation, then the contribution must be made 232
not later than sixty (60) days from the date of the allocation. 233
If the contribution is not made within such time period, the 234
allocation shall be cancelled and returned to the department for 235
reallocation. Upon final documentation of the contributions, if 236
the actual dollar amount of the contributions is lower than the 237
amount estimated, the department shall adjust the tax credit 238
allowed under this subsection. 239
(h) The aggregate amount of tax credits that may be 240
allocated under this subsection in any calendar year shall not 241
exceed Five Hundred Thousand Dollars ($500,000.00). 242
S. B. No. 2866 *SS36/R1262* ~ OFFICIAL ~
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ST: Income tax; authorize a credit for
contributions to certain charitable
organizations.
SECTION 2. Section 1 of this act shall be codified as a new 243
section in Chapter 7, Title 27, Mississippi Code of 1972. 244
SECTION 3. Nothing in this act shall affect or defeat any 245
claim, assessment, appeal, suit, right or cause of action for 246
taxes due or accrued under the income tax laws before the date on 247
which this act becomes effective, whether such claims, 248
assessments, appeals, suits or actions have been begun before the 249
date on which this act becomes effective or are begun thereafter; 250
and the provisions of the income tax laws are expressly continued 251
in full force, effect and operation for the purpose of the 252
assessment, collection and enrollment of liens for any taxes due 253
or accrued and the execution of any warrant under such laws before 254
the date on which this act becomes effective, and for the 255
imposition of any penalties, forfeitures or claims for failure to 256
comply with such laws. 257
SECTION 4. This act shall take effect and be in force from 258
and after January 1, 2026. 259