The Mississippi Supreme Court ruled that an affiliated group of telecommunications companies properly computed the Broadband Investment Credit in determining their franchise and income tax liabilities.  The Broadband Credit may be used by a taxpayer to offset up to 50% of the taxpayer’s tax liabilities in a given year.  The taxpayers filed separate Mississippi franchise tax returns and a single combined corporate income tax return.  On their separate franchise tax returns, each taxpayer calculated its allowable Broadband Credit by applying the 50% credit cap to the affiliated group’s aggregate tax liability.  The Mississippi Department of Revenue contended that the 50% credit cap should be applied against each taxpayer’s separate taxable income included in the combined return.  Agreeing with the taxpayers, the Supreme Court concluded that for purposes of the 50% credit cap, each taxpayer’s “tax liability” is the “sum of the taxpayers’ separate franchise tax liability and the total combined income tax liability of the affiliated group.”  The court explained that filing a combined return made each member jointly and severally liable for the entire tax liability.


Miss. Dep’t of Revenue v. SBC Telecom, Inc., No. 2019-CA-00917-SCT (Miss. Aug. 13, 2020).