Mississippi – Look Back Period Limits

SALT Report 2303 – Mississippi Governor Phil Bryant has signed into law a Bill that, in certain circumstances, limits the examination period for sales tax audits to one year. Specifically, House Bill 892 provides that an “examination 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.”

Additionally, section 12 27-65-37, Mississippi Code of 1972, has been amended to provide that “if in an audit of the sales tax records of a taxpayer by the Department of Revenue it is determined that during the period being audited the taxpayer reported and paid tax in accordance with a method used during a prior period which had been audited by the Department and not found to result in any additional sales tax due, the Department shall be estopped from collecting any additional taxes as a result of the use of the previously audited method.”

However, while the new law does limit the examination period, it does not limit the amount of time the Department can take to make a determination.

For Further Information

Mississippi State Legislature – House Bill 892