MS HB2

Amends Mississippi Code Section 27-7-17 to define "valid business purpose" as business activity or transactions that improve the taxpayer's economic position apart from tax effects, as further defined by regulation.

Restricts deductibility of intangible expenses and interest expenses paid to related members unless the taxpayer can establish the transaction has valid business purpose, economic substance, comparable arm's-length terms, and that tax avoidance is not a significant motivation.

Requires that if development or purchase costs of intangible property were shared by the party making payment, that party must have been compensated at fair market arm's-length price, or the expenses become non-deductible.

Prohibits related members primarily engaged in acquiring, using, maintaining, or disposing of intangible property from benefiting from the deduction exception.

Effective January 1, 2015.