Bill Text: MS SB2095 | 2013 | Regular Session | Introduced
Bill Title: Contractor's tax; increase rate, increase contract amount needed to be eligible for and include certain personal property under.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Failed) 2013-02-27 - Died In Committee [SB2095 Detail]
Download: Mississippi-2013-SB2095-Introduced.html
MISSISSIPPI LEGISLATURE
2013 Regular Session
To: Finance
By: Senator(s) Fillingane
Senate Bill 2095
AN ACT TO AMEND SECTION 27-65-21, MISSISSIPPI CODE OF 1972, TO INCREASE THE TAX IMPOSED UPON PERSONS ENGAGING IN THE BUSINESS OF CONTRACTING TO 4-1/2% OF THE TOTAL CONTRACT PRICE OR COMPENSATION RECEIVED; TO INCREASE FROM $10,000.00 TO $100,000.00 THE COMPENSATION THAT MUST BE RECEIVED IN ORDER FOR THIS TAX TO APPLY; TO PROVIDE THAT FREE-STANDING FURNITURE, APPLIANCES AND OTHER SIMILAR TANGIBLE PERSONAL PROPERTY THAT REMAIN WITH THE STRUCTURE BEING ERECTED OR REPAIRED TO SHALL BE CONSIDERED COMPONENT PARTS OF THE STRUCTURE IF THE TOTAL CONTRACT PRICE OR COMPENSATION RECEIVED FOR THE PROJECT EXCEEDS $100,000.00, EXCLUSIVE OF THE FREE-STANDING PROPERTY IF THE CONTRACT PRICE INCLUDES CHARGES FOR THE FREE-STANDING PROPERTY; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. Section 27-65-21, Mississippi Code of 1972, is amended as follows:
27-65-21. (1) (a) (i)
Upon every person engaging or continuing in this state in the business of
contracting or performing a contract or engaging in any of the activities, or
similar activities, listed below for a price, commission, fee or wage, there is
hereby levied, assessed and shall be collected a tax equal to * * *
four
and one-half percent (4-1/2) of the total contract price or compensation
received, including all charges related to the contract such as finance charges
and late charges, from constructing, building, erecting, repairing, grading,
excavating, drilling, exploring, testing or adding to any building, highway,
street, sidewalk, bridge, culvert, sewer, irrigation or water system, drainage
or dredging system, levee or levee system or any part thereof, railway,
reservoir, dam, power plant, electrical system, air-conditioning system,
heating system, transmission line, pipeline, tower, dock, storage tank, wharf,
excavation, grading, water well, any other improvement or structure or any part
thereof when the compensation received, excluding any free-standing
furniture, appliances, or other similar tangible personal property, exceeds * * *
One
Hundred Thousand Dollars ($100,000.00). Such activities shall not include
constructing, repairing or adding to property which retains its identity as
personal property except to the extent that the personal property
constitutes a component part of the structure to be erected or repaired as
described in subparagraph (iii) of this paragraph. The tax imposed in this
section is levied upon the prime contractor and shall be paid by * * * the prime contractor.
(ii) Amounts
included in the contract price or compensation received representing the sale
of manufacturing or processing machinery for a manufacturer or custom processor
shall be taxed at the rate of one and one-half percent (1-1/2%) in lieu of the * * *
four
and one-half percent (4-1/2).
(iii) Free-standing furniture, appliances and other similar tangible personal property that remain with the structure being erected or repaired, shall be considered component parts of the structure to be erected or repaired if the total contract price for the project, exclusive of the free-standing tangible personal property, exceeds the sum of One Hundred Thousand Dollars ($100,000.00) and the total contract price or compensation received for the construction includes the
furniture, appliances and other similar tangible personal property. The purchase of free-standing furniture, appliances and other similar tangible personal property by the owner of the project or someone other than the general contractor shall be subject to the applicable retail sales tax rate under Section 27-65-17, unless otherwise exempt.
(b) The following shall be excluded from the tax levied by this section:
(i) The contract
price or compensation received for constructing, building, erecting, repairing
or adding to any building, electrical system, air-conditioning system, heating
system or any other improvement or structure which is used for or primarily in
connection with a residence or dwelling place for human beings. * * * These residences shall include
homes, mobile homes, summer cottages, fishing and hunting camp buildings and
similar buildings, but shall not include apartment buildings, condominiums,
hotels, motels, hospitals, nursing or retirement homes, tourist cottages or
other commercial establishments.
(ii) The portion of the total contract price attributable to design or engineering services if the total contract price for the project exceeds the sum of One Hundred Million Dollars ($100,000,000.00).
(iii) The contract
price or compensation received to restore, repair or replace a utility
distribution or transmission system that has been damaged due to ice storm,
hurricane, flood, tornado, wind, earthquake or other natural disaster if * * * the restoration, repair or
replacement is performed by the entity providing the service at its cost.
(iv) The contract price or compensation received for constructing, building, erecting, repairing or adding to any building, facility or structure located at any refinery as defined in Section 27-65-24.
(c) Sales of materials and services for use in the activities hereby excluded from taxes imposed by this section, except services used in activities excluded pursuant to paragraph (b)(iii) of this subsection, shall be subject to taxes imposed by other sections in this chapter.
(2) Upon every person
engaging or continuing in this state in the business of contracting or
performing a contract of redrilling, or working over, or of drilling an oil
well or a gas well, regardless of whether * * * the well is productive or
nonproductive, for any valuable consideration, there is hereby levied, assessed
and shall be collected a tax equal to three and one-half percent (3-1/2%) of
the total contract price or compensation received when such compensation
exceeds * * * One Hundred Thousand Dollars ($100,000.00).
The words, terms and phrases as used in this subsection shall have the meaning ascribed to them as follows:
"Operator" -- One who holds all or a fraction of the working or operating rights in an oil or gas lease, and is obligated for the costs of production either as a fee owner or under a lease or any other form of contract creating working or operating rights.
"Bottom-hole contribution" -- Money or property given to an operator for his use in the drilling of a well on property in which the payor has no interest. The contribution is payable whether the well is productive or nonproductive.
"Dry-hole contribution" -- Money or property given to an operator for his use in the drilling of a well on property in which the payor has no interest. Such contribution is payable only in the event the well is found to be nonproductive.
"Turnkey drilling contract" -- A contract for the drilling of a well which requires the driller to drill a well and, if commercial production is obtained, to equip the well to such stage that the lessee or operator may turn a valve and the oil will flow into a tank.
"Total contract price or compensation received" -- As related to oil and gas well contractors, shall include amounts received as compensation for all costs of performing a turnkey drilling contract; amounts received or to be received under assignment as dry-hole money or bottom-hole money; and shall mean and include anything of value received by the contractor as remuneration for services taxable hereunder. When the kind and amount of compensation received by the contractor is contingent upon production, the taxable amount shall be the total compensation receivable in the event the well is a dry hole. The taxable amount in the event of production when the contractor receives a production interest of an undetermined value in lieu of a fixed compensation shall be an amount equal to the compensation to the contractor if the well had been a dry hole.
(3) When the work to be
performed under any contract is sublet by the prime contractor to different
persons, or in separate contracts to the same persons, each * * * subcontractor performing any part of * * * the work shall be liable for the
amount of the tax which accrues on account of the work performed by * * * the person when the tax heretofore
imposed has not been paid upon the whole contract by the prime contractor.
When a person engaged in any
business on which a tax is levied in Section 27-65-23, also qualifies as a
contractor, and contracts with the owner of any project to perform any services
in excess of * * * One Hundred Thousand Dollars
($100,000.00) * * *
taxed under this section, * * * the person shall pay the tax
imposed by this section in lieu of the tax imposed by Section 27-65-23.
Any person entering into any
contract over * * * One Hundred Thousand Dollars
($100,000.00) as defined in this section shall, before beginning the
performance of * * *
the contract or contracts, either pay the contractors' tax in advance,
together with any use taxes due under Section 27-67-5, or execute and file with
the commissioner a good and valid job bond in a surety company
authorized to do business in this state, or with sufficient sureties to be
approved by the commissioner conditioned that all taxes which may accrue to the
State of Mississippi under this chapter, or under Section 27-67-5 and Section
27-7-5, will be paid when due. * * * The payments of the taxes due or the execution and
filing of a surety bond shall be a condition precedent to the commencing work
on any contract taxed * * *
under this section. * * * When any bond is filed in lieu
of the prepayment of the tax under this section, * * * the tax shall be payable monthly on the
amount received during the previous month, and any use taxes due shall be
payable on or before the twentieth day of the month following the month in
which the property is brought into Mississippi.
Any person failing either to
execute * * *
the bond * * *
provided for in this section, or to pay the taxes in advance, before
beginning the performance of any contract, shall be denied the right to
perform * * *
the contract until he complies with * * * those requirements, and the
commissioner is hereby authorized to proceed either under Section 27-65-59,
under Section 27-65-61 or by injunction to prevent any activity in the
performance of * * *
the contract until either a satisfactory bond is executed and filed, or
all taxes are paid in advance, and a temporary injunction enjoining the
execution of * * *
the contract shall be granted without notice by any judge or chancellor
now authorized by law to grant injunctions.
Any person liable for a tax
under this section may apply for and obtain a material purchase certificate
from the commissioner which may entitle the holder to purchase materials and
services that are to become a component part of the structure to be erected or
repaired with no tax due. * * *Provided, that The contractor applying for the contractor's
material purchase certificate shall furnish the Department of Revenue a list of
all work sublet to others, indicating the amount of work to be performed, and
the names and addresses of each subcontractor. Any person issued a material
purchase certificate shall provide a copy of their certificate to their
material and service providers as proof that there is no tax due on the
materials and services that are to become a component part of the structure to
be erected or repaired.
SECTION 2. This act shall take effect and be in force from and after October 1, 2013.
