The Mississippi Governor has signed S.B. 2746, which, effective July 1, 2005, levies a contractor’s sales tax and provides for the issuance of a jeopardy assessment, lien, and warrant against unqualified contracts and contracts for which taxes have not been prepaid or bonded in a proper manner. The bill levies a tax equal to 3 % upon every person engaging or continuing in this state in the business of contracting or performing a contract or engaging in any of the activities, or similar activities, listed in the bill for a price, commission, fee or wage. The tax is levied on the total contract price or compensation received when the compensation exceeds $10,000.00. A tax rate of 1 % is imposed on amounts included in a contract price or compensation received in regards to the sale of manufacturing or processing machinery for a manufacturer or custom processor. Excluded from the tax is the contract price or compensation relating to contracts for personal residences; the portion of a contract exceeding $100,000,000.00 related to design or engineering services; and the contract price or compensation related to restoring, repairing, or replacing a utility distribution system that has been damaged by natural causes such as hurricanes or floods. Also included in the bill is a statement that the Mississippi State Tax Commissioner may seek a jeopardy assessment, lien, and warrant against contracts deemed unqualified or contracts in which proper taxes have not been paid before contract work begins. In this case, the term unqualified contract references a contract where a bond has not been executed. (S.B. 2746, Mississippi State Tax Commission, effective July 1, 2005)