On May 14, 2020, the Mississippi Legislature passed a bill allocating $300 million of coronavirus relief for small businesses. This new legislation provides for:
- A direct payment program of $2,000 per business and
- An application-based grant program of up to $25,000 per business.
For purposes of both programs, an eligible small business:
- Must be registered with the Department of Revenue (direct) or Secretary of State (grant),
- Filed Mississippi taxes for tax year 2018 or 2019, or, for a business formed on or after January 1, 2020, intends to file Mississippi taxes for tax year 2020, unless exempt;
- Had no more than 50 full-time equivalent employees (FTE) as of March 1, 2020; and
- Is not a subsidiary of a business with more than 50 FTE employees, is not part of a larger business enterprise with more than 50 FTE employees, and is not owned by a business with more than 50 FTE employees.
Direct Payment Program
The new legislation provides a direct payment of $2,000 per business. An eligible taxpayer is defined as a resident taxpayer, or a taxpayer with a permanent place of business located in the state, that:
- Had a North American Industry Classification System category code of furniture stores, home furnishings stores, clothing stores, shoe stores, jewelry, luggage, leather goods stores, sporting goods, hobby, musical instrument stores, book stores, news dealers, florists, office supplies, stationery and gift stores, used merchandise stores, other miscellaneous retail stores, motion picture and video industries, other schools and instruction facilities, child daycare services, performing arts companies, spectator sports, amusement parks and arcades, other amusement and recreation industries, restaurants and other eating places or personal care services, before March 1, 2020, and was also engaged as an active business in such activity before March 1, 2020; and
- Was subject to any COVID-19 related state, municipal and/or county required business closure, or voluntary closure.
This legislation establishes an application-based grant program for additional compensation. Eligible businesses that do not want to itemize their expenses may receive a base payment of $1,500 plus $500 per FTE employee up to a maximum grant of $25,000. The total payment is reduced by the amount of any Paycheck Protection Program (PPP) funds, Economic Injury Disaster Loan (EIDL) Emergency Advance funds up to a maximum of $10,000, and business interruption insurance proceeds received; however, the total payment will not be reduced by more than half. Grants awarded are not subject to tax; however, eligible expenses for which grants are received may not be itemized as tax deductions.
An eligible business is defined as a for-profit corporation, a limited liability company (LLC), partnership, or sole proprietorship that:
- Suffered an interruption of business;
- Has a controlling interest owned by one or more Mississippi residents, whether individual resident citizens or Mississippi domestic business entities;
- Has customers or employees coming to its physical premises, conducts business on customer premises, or has an owner who is an active participant in the day-to-day operations of the business;
- Does not exist for the purpose of advancing partisan political activities, does not directly lobby federal or state officials, and has not employed or otherwise worked with a lobbyist in any way at any point during 2020; and
- Does not derive income from passive investments without active participation in business operations.
How Does This Legislation Impact My Business?
Understanding the relief options provided at both the federal and state levels can be confusing for business owners, especially as you also seek to provide other resources for yourself and your employees during this trying time. To understand how these relief provisions apply to your business, we encourage you to reach out to your CRI advisor, who can help you determine eligibility and how to make the best use out of this state-level relief and the relief options offered by the federal government.