35 Miss. Code. R. 3-10-03-100 - GROSS INCOME:

1. Gross receipts or gross income of all insurance companies, including mutuals, reciprocals, and all types of insurance companies or associations, of whatever nature or by whatever term designated, shall include premiums, reinsurance premiums, considerations for annuities and supplementary contracts, interest including interest income on mortgage loans secured by real estate located in Mississippi, rent, dividends, and all other income, regardless of character or designation, unless otherwise exempted or provided for, under the provisions of the act. Gross income shall be computed on an accrual basis unless, because of taxpayer's accounting system, a more accurate computation can be made on a receipts basis.

2. If reserve funds maintained for the purpose of liquidating policies and contracts at maturity or on surrender are transferred to surplus, the portion, so transferred that has been taken as a deduction from Mississippi gross income in the current year or prior years shall be included in Mississippi gross income for the year in which such transfer is made.

3. Code Section 27-7-15(4)(g), provides for the exclusion of gross income received by domestic corporations taxable in another state, and derived from business activity conducted outside this state. The Commissioner has construed the provision as permitting a domestic company to exclude only direct premiums and insurance considerations derived from other taxable states and jurisdictions when such income is earned through the operation of a bona fide office, agency or place of business without the State of Mississippi. When a company excludes income, it must exclude all expenses incurred in earning that income, including retaliatory premium taxes. All reinsurance assumed premiums of a domestic company and all other income must be included in Mississippi income, unless earned from sources without the state as defined in the statute.

4. Mississippi gross income from foreign insurance companies shall include all direct premiums and considerations derived from within this state as shown by the company's annual statement, and all reinsurance assumed premiums received from Mississippi companies. There also shall be included the income from intangible property including interest income on mortgage loans secured by real estate located in Mississippi, if the evidence of ownership has acquired a business, commercial or actual situs in this state; rentals or royalties from property or any interest in property within the state, and income from the operation, ownership or sale of any property within this state.

5. Life insurance companies must report their income under the direct accounting method. Other insurance companies in lieu of the direct accounting method may determine their Mississippi net income from underwriting by apportioning to this state a part of their total net underwriting income. Companies electing to use the apportionment method should compute their Mississippi net income in the following manner:

a. From a company-wide net underwriting gain, as shown by the company's annual statement, deduct policy dividends, which qualify as a deduction.

b. Apply to the remainder so computed, the ratio between Mississippi net premiums written and company-wide net premiums written.

c. To the Mississippi net income thus apportioned add the net income from intangible property if the evidence of ownership has acquired a business, commercial or actual situs in this state; the net rental and royalty income from property or any interest in property within this state; and net income from the operation, ownership or sale of any property within this state.

d. Deduct from the total so computed any net losses from the rental, lease, operation, ownership or sale of any property within this state.

e. Add or deduct other income or other losses, which are not specific to any state, in the ratio of Mississippi net premiums written to company- wide net premiums written.

6. Once the apportionment method of reporting is elected, it must follow for subsequent years unless permission is granted by the Commissioner to change to the direct accounting method. One of a group of affiliated companies may use the apportioned method of reporting only if all the non-life companies of the same group use said method.

Notes

35 Miss. Code. R. 3-10-03-100