Mississippi Sales and Use Tax Protest

MISSISSIPPI SALES AND USE TAX — PROTEST AND REFUND CLAIM

TABLE OF CONTENTS

1. Caption and Filing Information
2. Identification of Taxpayer and Notice
3. Timeliness
4. Statement of Facts
5. Wayfair / Economic Nexus Analysis
6. Grounds for Protest
7. Specific Errors in the Assessment
8. Refund Claim
9. Relief Requested
10. Request for Hearing and Procedural Rights
11. Reservation of Rights and Further Appeal
12. Verification
13. Signature and Service
14. Mississippi Practice Notes
15. Sources and References

1. CAPTION AND FILING INFORMATION

BEFORE THE MISSISSIPPI DEPARTMENT OF REVENUE

BOARD OF REVIEW

PROTEST OF SALES AND USE TAX ASSESSMENT [AND/OR REFUND CLAIM]

Assessment / Account No.: [________________________________]

Tax Type: ☐ Sales Tax (Miss. Code Ann. § 27-65-1 et seq.) ☐ Use Tax (Miss. Code Ann. § 27-67-1 et seq.)

Tax Period(s): [________________________________]

Amount in Dispute / Refund Sought: $[________________________________]

2. IDENTIFICATION OF TAXPAYER AND NOTICE

2.1. Petitioner [TAXPAYER LEGAL NAME] ("Taxpayer") is a [Mississippi-based / out-of-state] [entity type] with a principal address at [ADDRESS].

2.2. Taxpayer's Mississippi sales-tax permit number / use-tax account number is [________________________________], FEIN [________________].

2.3. Taxpayer [is registered / is not registered] with the Mississippi Secretary of State as a foreign entity qualified to do business in Mississippi.

2.4. On [DATE], the Mississippi Department of Revenue ("Department" or "DOR") mailed Taxpayer a [Notice of Assessment / Notice of Use Tax Assessment / Refund Denial] identified as Account / Assessment No. [NO.], asserting [liability of / denial of refund of] $[AMOUNT] for the period [PERIOD] (the "Notice"). A true copy is attached as Exhibit A.

2.5. The Notice asserts adjustments principally on the following grounds: [summarize — e.g., unreported retail sales, denial of resale exemption, alleged economic nexus under Section 27-65-13, denial of industrial exemption under Section 27-65-101].

3. TIMELINESS

3.1. Sixty-day appeal. Under Miss. Code Ann. § 27-77-5, a taxpayer aggrieved by an assessment of tax or by the denial of a refund claim must file a written appeal with the DOR Board of Review within sixty (60) days from the date the Department mailed or delivered written notice of the action. The Notice was mailed on [DATE]. The 60-day deadline is [CALCULATED DEADLINE]. This protest is filed on [FILING DATE].

3.2. Refund-claim limitations period. To the extent this filing seeks a refund, Miss. Code Ann. § 27-65-42 requires that a refund claim be filed within thirty-six (36) months from the date the return was filed or the assessment was made. The earliest period for which a refund is sought is [PERIOD], the return for which was filed on [DATE], making the refund claim timely.

3.3. Mailbox / electronic-filing rules. Filing is timely if (a) postmarked on or before the deadline, (b) hand-delivered before close of business on the deadline, or (c) emailed to [email protected] by 11:59 p.m. on the deadline. If the deadline falls on a Saturday, Sunday, or Mississippi state holiday, it rolls to the next business day. Miss. Code Ann. § 27-77-5.

4. STATEMENT OF FACTS

4.1. Business activities. Taxpayer is engaged in the business of [describe — e.g., online retail, manufacturing, food service, software-as-a-service, professional services] with operations principally conducted [in / outside of] Mississippi.

4.2. Mississippi presence. Taxpayer [has / does not have] physical presence in Mississippi during the audit period. [If applicable, describe property, employees, inventory, contractors, and any in-state activities.]

4.3. Sales into Mississippi. During the audit period, Taxpayer's gross sales into Mississippi were as follows:

4.4. Tax collection and remittance. Taxpayer [collected and remitted / did not collect and remit] Mississippi sales/use tax during the audit period. [Describe basis for non-collection — e.g., resale or other exemption, no nexus, marketplace facilitator handled.]

4.5. Audit history. The Department initiated an audit by letter dated [DATE] issued by [AUDITOR NAME] of the Sales and Use Tax Bureau. Taxpayer responded to all IDRs and produced [summary of records].

4.6. Adjustments at issue. The Department's audit report reflects the following principal adjustments, each disputed:

5. WAYFAIR / ECONOMIC NEXUS ANALYSIS

5.1. Under Miss. Code Ann. § 27-65-13, as construed by the DOR in 35 Miss. Admin. Code Pt. IV, Subpart 3, Ch. 09 (effective Sept. 1, 2018) and confirmed by 2020 legislation, a remote seller is required to register, collect, and remit Mississippi sales/use tax only if its sales into Mississippi exceed $250,000 over any consecutive twelve-month period. Mississippi's threshold is materially higher than the $100,000 / 200-transaction Wayfair baseline used in most states, and Mississippi has no transaction-count component.

5.2. Sales facilitated by a "marketplace facilitator" that collects Mississippi tax on the seller's behalf do not count toward the seller's $250,000 nexus calculation. [Apply to Taxpayer's facts.]

5.3. Applying the foregoing rule to Taxpayer's facts:

• ☐ Taxpayer's direct sales into Mississippi were below $250,000 over every relevant 12-month period; therefore, no economic nexus exists and the Assessment must be vacated as to all alleged out-of-state sales.
• ☐ Alternatively, Taxpayer's nexus, if any, did not arise until [DATE], after which Taxpayer [registered / began collecting]; the Department has erroneously assessed periods predating nexus.
• ☐ Alternatively, the Department has improperly counted marketplace-facilitator sales toward the $250,000 threshold.

5.4. Imposition of Mississippi sales or use tax on a seller below the statutory threshold violates the substantial-nexus prong of Complete Auto Transit, Inc. v. Brady, 430 U.S. 274 (1977), and the Commerce Clause as construed in South Dakota v. Wayfair, Inc., 138 S. Ct. 2080 (2018), which authorized only economic-nexus rules that include a safe harbor for small sellers.

6. GROUNDS FOR PROTEST

6.1. Lack of nexus. Taxpayer did not have substantial nexus with Mississippi during all or part of the audit period because Taxpayer (a) had no physical presence in Mississippi and (b) did not exceed the $250,000 economic-nexus threshold under Miss. Code Ann. § 27-65-13.

6.2. Misclassification of sales. The Department has miscategorized sales as taxable retail sales when they were in fact [exempt wholesale sales / sales for resale supported by valid resale certificates / sales of services not enumerated as taxable under Miss. Code Ann. § 27-65-23 / sales of items qualifying for the industrial exemption under § 27-65-101].

6.3. Erroneous denial of exemption. Taxpayer holds and timely produced valid Mississippi exemption documentation, including [Resale Certificate / Direct Pay Permit / MPC certificate / Industrial Exemption letter]. The Department's denial of the exemption is contrary to Miss. Code Ann. § [____] and the Department's own guidance.

6.4. Improper use-tax accrual. Use tax under Miss. Code Ann. §§ 27-67-1 et seq. has been improperly accrued on [describe items, e.g., property purchased for resale, property removed from inventory for non-taxable use, or property otherwise exempt].

6.5. Statute of limitations. Some or all of the audit period is barred by the 36-month limitations period under Miss. Code Ann. §§ 27-65-42 and 27-67-15.

6.6. Penalty abatement. Penalties asserted under Miss. Code Ann. §§ 27-65-39 and 27-67-23 should be abated for reasonable cause: Taxpayer relied in good faith on [professional advice / DOR guidance / federal determination / belief in non-nexus status], exercised ordinary business care and prudence, and disclosed all required information.

6.7. Interest. Interest follows the tax. Recomputation is required upon any reduction or vacatur of the Assessment.

6.8. Constitutional / due-process error. To the extent the Assessment imposes Mississippi tax in violation of the Commerce Clause, Due Process Clause, or Wayfair small-seller safe harbor, the Assessment is unconstitutional and must be cancelled.

7. SPECIFIC ERRORS IN THE ASSESSMENT

7.1. Adjustment No. 1 — [DESCRIPTION].

• Department's position: [summary].
• Taxpayer's position: [summary].
• Authority: Miss. Code Ann. § [____]; 35 Miss. Admin. Code Pt. IV, [REG.].
• Correct treatment: [result].

7.2. Adjustment No. 2 — [DESCRIPTION].

• Department's position: [summary].
• Taxpayer's position: [summary].
• Authority: [citation].
• Correct treatment: [result].

7.3. Adjustment No. 3 — [DESCRIPTION].

• Department's position: [summary].
• Taxpayer's position: [summary].
• Authority: [citation].
• Correct treatment: [result].

7.4. Penalties. Taxpayer requests abatement for the reasons set out in Section 6.6.

8. REFUND CLAIM

8.1. Pursuant to Miss. Code Ann. § 27-65-42, Taxpayer claims a refund of overpaid Mississippi sales/use tax in the amount of $[AMOUNT], plus statutory interest, for the periods identified below.

8.2. Basis for refund:

• ☐ Tax paid on exempt sales (resale, industrial exemption, MPC, etc.);
• ☐ Tax paid on non-taxable services not enumerated under Miss. Code Ann. § 27-65-23;
• ☐ Tax paid on transactions that did not occur in Mississippi;
• ☐ Use tax paid on property qualifying for an exemption;
• ☐ Mathematical or transposition error in original return;
• ☐ Other: [describe].

8.3. Refund schedule:

8.4. Supporting documentation, including amended returns, transaction-level detail, exemption certificates, and reconciliation work papers, is attached at Exhibit C.

9. RELIEF REQUESTED

9.1. Taxpayer respectfully requests that the Board of Review:

• A. Vacate the Assessment in its entirety; or, in the alternative,
• B. Reduce the Assessment to $[AMOUNT] consistent with the corrections in Sections 5 through 7;
• C. Sustain Taxpayer's refund claim in the amount of $[AMOUNT], plus statutory interest under Miss. Code Ann. § 27-65-53 (or applicable provision);
• D. Abate all penalties;
• E. Recompute interest in light of the corrected liability or refund; and
• F. Grant such further and additional relief as is just and proper.

10. REQUEST FOR HEARING AND PROCEDURAL RIGHTS

10.1. Taxpayer requests an in-person hearing before the Board of Review under Miss. Code Ann. § 27-77-5(2), with reasonable notice of the date, location, and assigned hearing officer.

10.2. Taxpayer intends to introduce:

• ☐ Documentary exhibits identified in the Exhibit List;
• ☐ Witness testimony from [NAMES, TITLES];
• ☐ Expert testimony, if any, on [SUBJECT].

10.3. Taxpayer's authorized representative is:

• Name: [NAME]
• Mississippi Bar / License No.: [NUMBER]
• Firm: [FIRM]
• Address: [ADDRESS]
• Phone / Email: [NUMBER / EMAIL]

A signed Mississippi Power of Attorney (Form 21-002) is attached as Exhibit B.

10.4. Taxpayer requests pre-hearing access to the Department's audit work papers, internal correspondence regarding the Assessment, and all materials the Department intends to rely upon.

11. RESERVATION OF RIGHTS AND FURTHER APPEAL

11.1. Taxpayer reserves the right to:

• Amend or supplement this protest as new information becomes available;
• Raise additional grounds based on the administrative record;
• Appeal any adverse Board of Review order to the Mississippi Board of Tax Appeals within sixty (60) days under Miss. Code Ann. § 27-77-5(4);
• File a petition for judicial review in the Chancery Court of the First Judicial District of Hinds County, Mississippi (or chancery court of Taxpayer's county of residence or place of business) within sixty (60) days of any adverse BTA order under Miss. Code Ann. § 27-77-7; and
• Pursue further review in the Mississippi Supreme Court.

11.2. Nothing in this protest shall constitute a waiver of any procedural, substantive, statutory, or constitutional right.

12. VERIFICATION

STATE OF MISSISSIPPI

COUNTY OF [________________________________]

I, [NAME], being first duly sworn, depose and say that I am the [Taxpayer / authorized officer / representative] in the foregoing matter; that I have read the foregoing Protest and Refund Claim; and that the factual statements contained therein are true and correct to the best of my knowledge, information, and belief.

[________________________________]

[NAME]

[TITLE, if applicable]

Sworn to and subscribed before me this [____] day of [_______________], 20[____].

[________________________________]

Notary Public

(My Commission Expires: [_______________])

13. SIGNATURE AND SERVICE

Date: [FILING DATE]

Respectfully submitted,

[LAW FIRM NAME]

By: [________________________________]

[ATTORNEY NAME], Mississippi Bar No. [####]

Counsel for Taxpayer

[STREET ADDRESS]

[CITY, STATE ZIP]

Telephone: [NUMBER]

Email: [EMAIL]

CERTIFICATE OF FILING. I certify that on the date above I filed this Protest and Refund Claim with the Mississippi Department of Revenue, Board of Review, by [email to [email protected] / U.S. mail to P.O. Box 22828, Jackson, MS 39225-2828 / hand delivery to 500 Clinton Center Drive, Clinton, MS 39056], with a courtesy copy to the assigned auditor at [ADDRESS / EMAIL].

[________________________________]

[ATTORNEY NAME]

14. MISSISSIPPI PRACTICE NOTES

• MS economic-nexus threshold is HIGHER than the national norm. Mississippi requires $250,000 in sales into the state over any 12 months (no transaction-count test) under Miss. Code Ann. § 27-65-13 and 35 Miss. Admin. Code Pt. IV, Subpart 3, Ch. 09. Most states use $100,000 or 200 transactions. Sub-threshold remote sellers should never have Mississippi nexus, and any DOR assessment in that posture is presumptively defective. Always confirm whether marketplace-facilitator sales were correctly excluded from the threshold calculation.
• Marketplace facilitator law (since July 1, 2020). Marketplace facilitators with more than $250,000 in MS sales must collect and remit on behalf of third-party sellers. Such sales are excluded from the third-party seller's nexus calculation and from the seller's own remittance obligation.
• Sales-tax rate. The general MS sales-tax rate is 7%, with a 1.5% rate for manufacturing machinery, 3.5% for manufactured-housing sales, reduced rates for farm/forestry equipment, and city-level Tourism and Economic Development Tax (TED) on top of the state rate in some jurisdictions. Verify rate accuracy as a separate ground.
• Use tax. Mississippi imposes use tax under Miss. Code Ann. § 27-67-1 et seq. on tangible personal property used in the state where MS sales tax was not paid at purchase. Direct-pay permit holders accrue tax themselves; review the DOR's permit and accrual records carefully.
• Refund claim limitations. A refund claim under Miss. Code Ann. § 27-65-42 must be filed within 36 months from the date the return was filed or the assessment was made. Filing the refund claim with the DOR (not the BTA) is the proper channel; denial triggers a 60-day appeal to the Board of Review.
• No bond requirement on chancery appeal. As of 2014, Miss. Code Ann. § 27-77-7 no longer requires a taxpayer to post bond or pay tax under protest as a condition of judicial review, unless the DOR moves the chancellor for security. This is a material litigation advantage for cash-constrained taxpayers.
• De novo review in chancery. The chancery court tries appeals from BTA orders de novo. The DOR's assessment carries a presumption of correctness, and the taxpayer bears the burden by a preponderance of the evidence.
• Penalty defenses. Reasonable cause is the principal defense. For nexus disputes, good-faith reliance on a state's threshold being below MS's is strong reasonable-cause evidence.
• Documentation discipline. Many MS sales-tax assessments turn on missing or stale exemption certificates. Maintain a current MTC / SST or MS-specific resale certificate file for every wholesale customer; replace any certificates that have expired or contain inaccurate information.

15. SOURCES AND REFERENCES

• Miss. Code Ann. § 27-65-1 et seq. (Sales Tax Law) — https://law.justia.com/codes/mississippi/title-27/chapter-65/
• Miss. Code Ann. § 27-65-13 (Economic nexus / persons doing business in this state) — https://law.justia.com/codes/mississippi/title-27/chapter-65/
• Miss. Code Ann. § 27-65-42 (Statute of limitations and refund claims) — https://law.justia.com/codes/mississippi/title-27/chapter-65/in-general/section-27-65-42/
• Miss. Code Ann. § 27-65-43 (Taxpayer must keep records) — https://law.justia.com/codes/mississippi/2020/title-27/chapter-65/subchapter-ingeneral/section-27-65-43/
• Miss. Code Ann. § 27-65-101 et seq. (Industrial and other exemptions) — https://law.justia.com/codes/mississippi/title-27/chapter-65/in-general/section-27-65-101/
• Miss. Code Ann. § 27-67-1 et seq. (Use Tax Law) — https://law.justia.com/codes/mississippi/title-27/chapter-67/
• Miss. Code Ann. § 27-77-5 (Appeals) — https://law.justia.com/codes/mississippi/title-27/chapter-77/section-27-77-5/
• Miss. Code Ann. § 27-77-7 (Chancery court review) — https://law.justia.com/codes/mississippi/title-27/chapter-77/section-27-77-7/
• 35 Miss. Admin. Code Pt. IV, Subpart 3, Ch. 09 (Economic-nexus rule) — https://www.sos.ms.gov/
• Mississippi DOR — Business Tax FAQs — https://www.dor.ms.gov/business/business-tax-frequently-asked-questions
• Mississippi DOR — Appeal Process and Hearings — https://www.dor.ms.gov/forms-resources/taxpayer-guidance/appeal-process-and-hearings
• Mississippi Board of Tax Appeals — https://www.bta.ms.gov/
• South Dakota v. Wayfair, Inc., 138 S. Ct. 2080 (2018)
• Complete Auto Transit, Inc. v. Brady, 430 U.S. 274 (1977)
• Equifax, Inc. v. Mississippi Dep't of Revenue, 125 So. 3d 36 (Miss. Ct. App. 2012)
• Sales Tax Institute — Mississippi Issues Economic Nexus Rule — https://www.salestaxinstitute.com/resources/mississippi-issues-economic-nexus-rule

Disclaimer: This template is provided for informational purposes only and does not constitute legal advice. An attorney licensed in Mississippi must review and customize this document before filing. Statutes, economic-nexus thresholds, and procedural rules change frequently; verify all authorities at the time of filing.