MS HB1691

Allows partnerships, S corporations, and similar pass-through entities to elect to be taxed as electing pass-through entities and pay income tax at the entity level beginning in calendar year 2022.

Entities may elect by submitting the appropriate form to the Department of Revenue anytime during the tax year or by the fifteenth day of the third month following the close of that taxable year, with approval required by vote or written consent of governing body members and owners/members/partners/shareholders holding greater than 50% voting control.

Owners, members, partners, or shareholders of electing pass-through entities must report their pro rata or distributive share of income but are not liable for income tax on that share, and receive a credit equal to their pro rata share of taxes paid by the entity.

Amends Section 27-7-25 to allow partnerships that elect under this act to pay income tax at the entity level, and amends Section 27-8-7 to make S corporations that elect under this act subject to entity-level taxation.

Effective January 1, 2022.