MS HB847

Expands Mississippi income tax to nonresidents by subjecting net income derived from property, activity or other sources within Mississippi to state income tax (amended Section 27-7-5).

Broadens the definition of "doing business" in Mississippi to include regular solicitation of business from potential customers, issuance of credit cards to Mississippi customers, performance of services outside Mississippi with benefits received in-state, franchising/licensing agreements, and transactions involving intangible personal property (amended Section 27-7-23).

Defines "valid business purpose" for tax deductions and restricts deductibility of interest expenses and intangible expenses paid to related members unless the transaction has valid business purpose, economic substance, arm's length terms, and the related member was fairly compensated for any development or purchase costs they shared (amended Section 27-7-17).

Provides phased elimination of tax-free income threshold for residents between 2018-2022, after which the first $5,000 of taxable income is tax-free, with rates of 3% on income up to $10,000 and 5% on income above $10,000.

Takes effect January 1, 2018.