If you want to start and run a Mississippi limited liability company (LLC), you'll need to prepare and file various documents with the state. This article covers the most important ongoing reporting and state tax filing requirements for Mississippi LLCs.
The State of Mississippi requires you to file an annual report for your LLC. You can mail in the report or complete it online at the Secretary of State website. Apart from first registering with the SOS online filing system, you'll also need to have your state-issued Business ID Number in order to file the report. You can find the ID number by doing a business name search on the SOS website.
Only a few pieces of information, such as the LLC's official name, the location of its principal office, and the name and street address of the resident agent, are required to complete the report.
The annual report can be filed any time on or after January 1 but not later than April 15. There is no filing fee for the annual report for a Mississippi LLC.
When it comes to income taxes, most LLCs are so-called pass-through tax entities. In other words, the responsibility for paying federal income taxes passes through the LLC itself and falls on the individual LLC members. By default, LLCs themselves do not pay income taxes, only their members do. Some states do impose a separate tax or fee on LLCs for the privilege of doing business in the state. Mississippi, though, is not one of those states.
However, in some cases, the owners of an LLC choose to have their business treated like a corporation for tax purposes. This choice is made by filing IRS Form 2553 with the IRS. (See the IRS website for the form.) Unlike the default pass-through tax situation, when an LLC elects to be taxed as a corporation, the company itself must file a separate tax return. The State of Mississippi, like almost every other state, has a corporation income tax. In Mississippi, the tax generally is calculated at a series of marginal rates. In addition, Mississippi assesses a corporation franchise tax. This additional tax generally is based on capital used, invested, or employed by a business. If your LLC is taxed as a corporation you'll need to pay both of these taxes. Pay by filing the state's corporation and franchise tax return (Form 83-105) with the Mississippi Department of Revenue (DOR). For more details, check Nolo’s article, 50-State Guide to Business Income Tax, or the DOR website.
Does your LLC have employees? If so, you'll need to pay employer taxes. Some of these taxes are paid to the federal government (the IRS) and are not covered here. (But note that federal employer tax obligations start with obtaining a federal employer identification number (EIN).) However, Mississippi employers also must pay taxes to the state.
First, you'll need to withhold and pay employee income taxes to the DOR. Begin by registering your business with the DOR online through Mississippi's Taxpayer Access Point (TAP). Once you've registered, you'll need to file withholding taxes on a periodic basis (typically monthly or quarterly). You'll also need to use Form 89-140 each year to reconcile your LLC's tax withholding.
In addition, you'll probably need to register to pay state unemployment insurance (UI) taxes. These are handed through the Mississippi Department of Employment Security (MDES). You can register on paper (Form UI-1) or online. Then, on a quarterly basis, you'll need to file Form UI-2/3 with the MDES. For more information, check the MDES website.
If your LLC will sell goods to customers in Mississippi, you will need to collect and pay sales tax. This means you'll have to register for this purpose with Department of Revenue. Register online on the DOR website. After you've registered, you'll be issued a sales tax permit. Then, on a periodic basis, you'll have to file forms reporting state sales tax collection. (The filing frequency depends on how much total tax you owe; if it's less than $600 for the year, you only need to file annually.) You can report and pay sales tax online through the DOR website or using paper returns.
If you will be doing business in states other than Mississippi, you may need to register your LLC in some or all of those states. Whether you're required to register will depend on the specific states involved: each state has its own rules for what constitutes doing business and whether registration is necessary. Often activities such as having a physical presence (a business location) in a state, hiring employees in a state, or soliciting business in a state (such as by telephone, print ads, mail, or the Internet) will be considered doing business for registration purposes. Registration usually involves obtaining a certificate of authority or similar document.
For more information on the requirements for forming and operating an LLC in Mississippi, see Nolo’s article, 50-State Guide to Forming an LLC, and other articles on LLCs in the LLC section of the Nolo website.