By Madison Barnett and Prenitss Willson

The Mississippi Supreme Court held that a casino operator was entitled to use tax credits—specifically, gambling license fee credits—earned by one combined group member to offset the entire combined group’s liability. Mississippi is generally a separate return state, but taxpayers may elect to file a post-apportionment, nexus-combined return. The Department asserted that the credit could only offset the portion of the combined group’s liability attributable to the individual group member that generated the credit. The court rejected the Department’s argument, reasoning that the credit could be used against the entity’s “income tax liability,” and as the entity is jointly and severally liable for the combined group’s liability, each member’s “liability” is equal to that of the combined group. Miss. Dep’t of Revenue v. Isle of Capri Casinos, Inc., 2012-CA-01419-SCT, 2014 WL 562025 (Miss. Feb. 13, 2014). The court largely relied on a prior case reaching the same result under Mississippi’s now-repealed consolidated return statute, Gen. Motors Corp. v. Miss. State Tax Comm’n, 510 So. 2d 498 (Miss. 1987).