Bill Text: MS SB2589 | 2015 | Regular Session | Engrossed

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Sale of property by nonresident; require seller to withhold for income taxes rather than the buyer.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Passed) 2015-04-20 - Approved by Governor [SB2589 Detail]

Download: Mississippi-2015-SB2589-Engrossed.html

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MISSISSIPPI LEGISLATURE

2015 Regular Session

To: Finance

By: Senator(s) Fillingane

Senate Bill 2589

(As Passed the Senate)

AN ACT TO AMEND SECTION 27-7-308, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT IN A SALE OF REAL PROPERTY AND ASSOCIATED TANGIBLE PERSONAL PROPERTY WHICH IS NOT CONSIDERED AN EXCHANGE OR TRADE OF SUCH PROPERTY AND WHICH RESULTS IN GROSS PROCEEDS GREATER THAN $100,000.00 PAID BY THE BUYER TO THE SELLER AND OWNED BY A NONRESIDENT, THE CLOSING AGENT OR SELLER, RATHER THAN THE BUYER, SHALL BE RESPONSIBLE FOR PAYING OVER TO THE DEPARTMENT OF REVENUE AN AMOUNT EQUAL TO 5% OF THE AMOUNT REALIZED BY THE SELLER; AND FOR RELATED PURPOSES.

     BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

     SECTION 1.  Section 27-7-308, Mississippi Code of 1972, is amended as follows:

     27-7-308.  (1)  (a)  If a closing agent is involved in a sale of real property and associated tangible personal property which is not considered an exchange or trade of such property, and * * * which the sale results in gross proceeds greater than One Hundred Thousand Dollars ($100,000.00) paid by the buyer to the seller or sellers, and the property is owned by a nonresident, the * * *buyer closing agent shall withhold from the proceeds of the sale and pay * * * over to the * * * State Tax Commission Department of Revenue an amount equal to five percent (5%) of the amount realized by the seller on the sale.

          (b)  If a closing agent is not involved in a sale of real property and associated tangible personal property which is not considered an exchange or trade of such property, and the sale results in gross proceeds greater than One Hundred Thousand Dollars ($100,000.00) paid by the buyer to the seller or sellers, and the property is owned by a nonresident, the seller shall pay to the Department of Revenue an amount equal to five percent (5%) of the amount realized by the seller on the sale.

           * * *However,(c)  If the amount required to be * * *withheld paid to the Department of Revenue pursuant to this subsection exceeds the net proceeds payable to the seller, the * * *buyer closing agent or the seller, as the case may be, shall * * * withhold and pay * * * over to the * * * commission department only the net proceeds otherwise payable to the seller.  For purposes of this section a corporation registered to do business in the State of Mississippi shall be considered a resident of the state.

     (2)  The failure of the * * * buyer to withhold or closing agent or seller to pay to the * * * State Tax Commission Department of Revenue the amount * * * to be withheld as provided for in subsection (1) of this section shall not impair or affect the title to such property, but the * * * buyer closing agent or seller shall be personally liable to the * * * State Tax Commission Department of Revenue for any amounts required to be * * * withheld paid according to subsection (1) of this section and not paid * * * over to the * * * State Tax Commission by the buyer department.

     (3)  (a)  If a closing agent is involved in the sale and the seller determines that the amount required to be * * * withheld paid pursuant to subsection (1) of this section will result in excess * * * withholding payment on any gain required to be recognized from the sale, the seller may provide the * * * buyer closing agent an affidavit signed under penalties of perjury stating the amount of the gain required to be recognized from the sale, and the * * * buyer closing agent shall * * * withhold pay the applicable percentage of the amount of the gain required to be recognized, if any, stated in the affidavit rather than as provided in subsection (1) of this section.

          (b)  If a closing agent is not involved in the sale and the seller determines that the amount required to be paid pursuant to subsection (1) of this section will result in excess payment on any gain required to be recognized from the sale, the seller shall pay the applicable percentage of the amount of the gain required to be recognized, if any, rather than as provided in subsection (1) of this section.

           * * *  However,(c)  If the amount required to be * * * withheld paid pursuant to this subsection exceeds the net proceeds payable to the seller, the * * * buyer closing agent or seller shall * * *withhold and pay over to the * * * commission department only the net proceeds otherwise payable to the seller.

     (4)  If a * * * withholding payment made pursuant to subsection (1) of this section results in an excess * * *withholding payment on any gain required to be recognized from the sale, the seller may file a claim for refund of the excess * * * withholding payment with the * * * commission department that includes an affidavit * * * as provided in subsection (3) of this section signed by the seller under penalties of perjury stating the amount of the gain required to be recognized from the sale and the * * * commission department shall refund the difference between the amount * * * withheld paid pursuant to subsection (1) of this section and the amount to be * * *withheld paid as provided in subsection (3) of this section.

     (5)  The * * * buyer closing agent or seller shall be required to send to the * * * State Tax Commission Department of Revenue the information returns for real estate transactions as required by the Internal Revenue Code of 1986, as amended.

     SECTION 2.  This act shall take effect and be in force from and after July 1, 2015.

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