27-7-308 - Withholding by buyer on gross proceeds realized by nonresident seller of real property; refund of excess withholding; filing with commission of federal information returns.
§ 27-7-308. Withholding by buyer on gross proceeds realized by nonresident seller of real property; refund of excess withholding; filing with commission of federal information returns.
(1) In a sale of real property and associated tangible personal property which is not considered an exchange or trade of such property and which results in gross proceeds greater than One Hundred Thousand Dollars ($100,000.00) paid by the buyer to the seller or sellers and owned by a nonresident, the buyer shall withhold and pay over to the State Tax Commission an amount equal to five percent (5%) of the amount realized by the seller on the sale. However, if the amount required to be withheld pursuant to this subsection exceeds the net proceeds payable to the seller, the buyer shall withhold and pay over to the commission only the net proceeds otherwise payable to the seller. For purposes of this section a corporation registered to do business in the State of Mississippi shall be considered a resident of the state.
(2) The failure of the buyer to withhold or pay to the State Tax Commission the amount to be withheld as provided in subsection (1) of this section shall not impair or affect the title to such property, but the buyer shall be personally liable to the State Tax Commission for any amounts to be withheld according to subsection (1) of this section and not paid over to the State Tax Commission by the buyer.
(3) If the seller determines that the amount required to be withheld pursuant to subsection (1) of this section will result in excess withholding on any gain required to be recognized from the sale, the seller may provide the buyer an affidavit signed under penalties of perjury stating the amount of the gain required to be recognized from the sale, and the buyer shall withhold the applicable percentage of the amount of the gain required to be recognized, if any, stated in the affidavit rather than as provided in subsection (1) of this section. However, if the amount required to be withheld pursuant to this subsection exceeds the net proceeds payable to the seller, the buyer shall withhold and pay over to the commission only the net proceeds otherwise payable to the seller.
(4) If a withholding payment made pursuant to subsection (1) of this section results in excess withholding on any gain required to be recognized from the sale, the seller may file a claim for refund of excess withholding with the commission that includes an affidavit as provided in subsection (3) of this section and the commission shall refund the difference between the amount withheld pursuant to subsection (1) of this section and the amount to be withheld as provided in subsection (3) of this section.
(5) The buyer shall be required to send to the State Tax Commission the information returns for real estate transactions as required by the Internal Revenue Code of 1986, as amended.
Sources: Laws, 1991, ch. 524, § 15, eff from and after July 1, 1991.