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Mississippi Issues Economic Nexus Rule

Effective Date: September 1, 2018

Threshold: Sales exceed $250,000

Measurement Date: Prior twelve month period

Includable Transactions: Gross sales; Marketplace sales excluded from the threshold for individual sellers

When You Need to Register Once You Exceed the Threshold: Next transaction

Effective December 1, 2017, Mississippi has adopted a rule stating that sellers who lack physical presence nexus in Mississippi but who are purposefully or systematically exploiting the Mississippi market have a substantial economic presence for use tax purposes if their sales into the state exceed $250,000 for the prior twelve months. These sellers are required to register with the Department of Revenue in order to collect and remit use tax. The tax must be stated separately from the sales price on invoices and accounted for separately on the seller’s records.

Purposefully or systematically exploiting the Mississippi market includes the following:
  • Television or radio advertising on a Mississippi station;
  • Telemarketing to Mississippi customers;
  • Advertising on billboards, wallscapes, bus benches, interiors and exteriors of buses, or other signage located in Mississippi;
  • Advertising in Mississippi newspapers, magazines, or other print media;
  • Emails, texts, tweets and any form of messaging directed to a Mississippi customer;
  • Online banner, text, or pop up advertising directed toward Mississippi customers;
  • Advertising to Mississippi customers through applications (“apps” ) or other electronic means on customer’s phones or other devices; or
  • Direct mail marketing to Mississippi customers.

Any seller who has collected and not remitted Mississippi tax on sales made before December 1, 2017 would still be liable for any tax collected. (Rule 35.IV.3.09, Mississippi Department of Revenue

UPDATE: The state has released a bulletin that they are evaluating the effective date – we will update as they release information.

UPDATE: After reviewing the decision, Mississippi announced an effective date of September 1, 2018. Remote sellers with annual Mississippi sales in excess of $250,000 should register for a Mississippi Use Tax Account by August 31, 2018 and begin collecting tax no later than September 1, 2018. Click here to read the full notice.

UPDATE: Effective July 1, 2020, Mississippi has enacted legislation that codifies the rule for economic nexus and contains marketplace nexus provisions. Per the legislation, a “person doing business in this state” (and thus has nexus for sales tax purposes) includes any marketplace facilitator, marketplace seller, or remote seller with sales that exceed $250,000 in any consecutive twelve-month period. A sale made through a marketplace facilitator is a sale of the marketplace facilitator and not the sale of a marketplace seller for purposes of determining whether a person exceeds the $250,000 threshold. Read our news item for more details.

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Posted on June 22, 2018