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Mississippi Limits Audit Examination Period

  • Mar 28, 2013 | Gail Cole

 Mississippi law means audits won't spiral out of control.miss

Mississippi Governor Phil Bryant (R) has signed into law a bill that limits the examination period for sales tax audits to one year. The bill places the same limitations on income tax audits.

HB 892 flew through both the House and Senate with no opposition. It amends sections 27-7-49, 27-13-49 and 27-65-42 of Mississippi Code of 1972 to read:

"...examinations of a taxpayer's income, franchise and sales tax returns shall be made within three years of the due date or the date the return was filed, whichever is later, unless the taxpayer is properly notified of the examination within the three-year examination period in which case the examination must be completed within one year after the expiration of the three-year examination period… ."

The legislation allows exceptions to the three-year and one-year limitations in certain cases.

Last year, MPB reported that the Mississippi Department of Revenue was "looking to collect nearly 395 million dollars in back taxes, interest and penalties." DOR spokeswoman Kathy Waterbury explained that budget cuts had created a severe lack of money in the department, "just even things like postage money and money to record liens and stuff… ."

An additional $5 million in revenue has allowed the department to collect more and more back taxes, so that last fall they were "about $30 million ahead of where we were this same time last year."

The new Mississippi law does not limit the amount of time the department can take to make a determination, but it does limit the examination period.

How would your business hold up to an audit?

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.