MS HB264

Expands Mississippi income tax on nonresidents to include net income derived from property, activity, or other sources within the state, effective January 1, 2019.

Revises the definition of "doing business" to include regular solicitation of business in Mississippi, issuance of credit/debit cards to Mississippi customers, performance of services outside Mississippi with benefits received within the state, and franchising/licensing agreements with Mississippi entities.

Modifies deduction rules for interest expenses and intangible property costs paid to related members, requiring transactions to have valid business purpose, economic substance, and arm's-length terms, with tax avoidance not being a significant motivation.

Defines "valid business purpose" as business motivation(s) that improve the taxpayer's economic position apart from tax effects, and expands "business income" classification tests to capture more income sources as taxable business income.

Requires income from services to be apportioned to the state where benefits are received, clarifying allocation rules for corporations with business activity in multiple states.