Sales, Use and International Tax Activity Update - May 2010

Refining Sales and Use Tax in Mississippi

Effective July 1, 2010 through June 30, 2011, special Mississippi sales and use tax rates and provisions are applicable to certain machinery and construction activities related to refineries in the state.

A tax of 1.5% is imposed on the gross proceeds of sales for manufacturing or processing machinery to be installed and/or used at a refinery in Mississippi without regard as to whether the machinery retains its identity as tangible personal property after installation.

A tax of 3.5% is imposed on 103.5% of the total contract price or compensation paid for the performance of a construction activity at or in regard to a refinery in Mississippi. "Refinery" means any facility that manufactures finished petroleum products from crude oil, unfinished oils, natural gas liquids, other hydrocarbons, or alcohol. "Refinery" does not include terminals, bulk plants, or other locations where finished products are blended.

Definitions are also provided for "construction activity" and "total contract price or compensation received."

Mississippi Code Ann. Sec. 27-65-24 and Sec. 27-65-5.

The Mississippi code sections can be viewed on the Mississippi Department of Revenue Web site.

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