MS HB1565

Creates the Inventory Tax Reduction Act allowing taxpayers a credit against inventory tax equal to 10% of ad valorem tax on inventory, increasing by 10% annually until reaching 50% maximum, beginning the first calendar year after three consecutive fiscal years with average State General Fund revenue growth of 5% or more.

Establishes the Inventory Tax Reduction Fund to be appropriated annually by the Legislature to reimburse counties and local taxing districts for inventory tax revenue lost due to the tax credit.

Department of Revenue shall certify revenue growth annually by September 1 and inform county tax collectors of credit amounts; tax collectors distribute reimbursements to local taxing districts, which must use funds as proceeds of inventory taxes.

Taxpayers delinquent on inventory taxes with interest reaching 12% are ineligible for the credit; those utilizing the existing income tax credit under Section 27-7-22.5 cannot claim the inventory tax credit in the same taxable year.

Act takes effect July 1, 2010.