In this Article, we will give you a snapshot of the legal compliance requirement and associated fees required to register Limited Liability Company (LLC) in Mississippi and most importantly, maintain the status of an LLC, especially as a small business e-commerce start up.
In the United States, LLCs are registered on the state level, therefore you can register an LLC in any of the 50 States in the United States, including Washington DC.
You can check out our the best states in the US to register your LLC as a small business e-commerce start-up, if you want to pay less State fees, less State imposed taxes and do less periodic paperwork in order to maintain your LLC.
In this Article, our focus is on Mississippi LLC. What cost should you expect to pay when you register an Mississippi LLC? What periodic filings requirements are imposed on Mississippi LLCs? What State taxes are levied on e-commerce small business start ups in Mississippi and what are the tax rates? What business permits are required to be obtained by e-commerce businesses in Mississippi, what’s the cost of these permits and are there any renewal requirements?
This Article presents you a snapshot, so you know what fees and legal compliance requirements to expect if you want to register an LLC for your e-commerce small business start up in Mississippi, operate with the required licenses and maintain your LLC status.
Business registration and compliance on Mississippi
LLC Registration cost; the state fee for registering an LLC in Mississippi is $53. You can register your LLC with Bizee for a service charge of $0 + the State fee.
LLC registration Publishing requirement; No, LLCs in Mississippi are not required to publish their registration in a local newspaper.
Has the Option to register as an Anonymous LLC; No, LLCs in Mississippi do not have the option to register as an anonymous LLC. Meaning that the business details of the LLC Owners are published on the Mississippi public records. The LLC can still maintain some privacy by using a virtual office address and not the Owners real addresses.
DBA requirement; DBA is optional if your LLC is operating under a different name than your LLC registered name. In Mississippi DBA is referred to as a “Fictitious business name”. Cost of registration is $25, the length of approval is 5 years. You can register for a DBA in Mississippi online or outsource the registration of your Alabama DBA (if needed) to Bizee.
Annual returns filing requirement; yes, Alabama LLCs have annual report filing requirements. The cost of filing annual report in Mississippi is $0
You can file the Mississippi annual returns yourself, you’ll need to visit the Mississippi online filing portal or you can outsource the filling of your annual returns to Bizee for a $99 service charge + the state fee.
Annual Franchise tax filing and compliance in Mississippi
State Franchise tax requirement; LLCs are generally not subject to Mississippi’s net worth tax (also known as the franchise tax). except if the LLC has elected to be taxed as an S or C-Corporation.
Mississippi’s franchise tax applies to most corporations doing business in the State. The rate is $2.50 per $1,000 of the value of the capital used, invested, or employed in the State.
You can learn more about the Mississippi Franchise tax.
Annual State income tax filing and compliance in Mississippi
State income tax requirement; Mississippi has a flat 5.00 percent individual income tax. Mississippi also has a 4.00 to 5.00 percent corporate income tax rate.
- Who files State income tax; LLCs by default are passed through entities meaning that tax obligation passes through to the individuals who own the LLC. Therefore an LLC with a default tax status pays the individual state income tax. Interestingly, if the individuals behind the LLC are not resident in the state and do not have state source income (a dependent agent in the state), then they are not required to pay “individual State income tax”.
If the LLC owners are resident in the State or have State source income (a dependent agent in the state), then the LLC Owners are required to pay “individual State income tax”.
If the LLC has elected to be taxed as a corporation (C-corp), then the LLC is required to pay “Corporate State income tax”.
- How to file state income tax; You can file your Mississippi State income tax by yourself. You will need to visit the State website. Alternatively, we recommend using the Service of a Certified Public Accountant (CPA), through H&R Block to file your state income tax.
Periodic Sales tax filing and compliance in Mississippi
Sales tax requirement; Mississippi has a 7.00 percent state sales tax rate, a max local sales tax rate of 1.00 percent, and an average combined state and local sales tax rate of 7.07 percent.
- Sales tax nexus; Sales tax nexus is
the state-defined threshold between a Seller and a state, which when reached makes it obligatory for the Seller to register for a Seller permit in the state, charge sales tax to customers in the state and remit the sales tax to the State Government.
Generally, there is the “physical sales tax nexus” and “economic sales tax nexus”.
Physical sales tax nexus is reached when the Seller had physical presence in the state (i.e have an office address, a warehouse etc).
In most States, “economic sales tax nexus” is reached when a Seller makes up to 200 transactions or $100,000 in sales in a State.
It’s important to note that, when you register your LLC in the State of Mississippi (which generally requires that you have a registered business address in Mississippi), you automatically meet the physical sales tax nexus and will be required to obtain a Sales tax permit in Mississippi, charge applicable sales tax rates to customers in Mississippi and remit sales tax to the Mississippi State Government.
Sales tax permit; It costs $0 to register for Mississippi sales tax permit Sales tax permit in Mississippi does not expire, provided the holder continues in the same business at the same location (a separate permit is required for each location). However, some businesses may be required to post a Sales Tax Bond or Surety Tax Cash Bond.
Reseller/Resale Certificate; Businesses who purchase products from their suppliers for the purpose of reselling those products to their customers can make sales tax free purchases from their suppliers if they have a resale certificate.
This means that Resale businesses can get cheaper product prices from their suppliers (that is product prices without sales tax included) which can help these Businesses have a higher profit margin and/or maintain competitive selling prices to their Customers.
Generally, suppliers will charge the sales tax rate applicable in the State where the product is to be delivered unless the business presents to the supplier a Resale Certificate (also called a Reseller Certificate).
The Resale certificate must be valid and acceptable in the state where the product is to be delivered.
Businesses can present any of the below listed Resale certificates to suppliers if they want to make sales tax free purchases for product delivery to an Mississippi address.
- A valid sales tax permit issued in Mississippi
- A valid out-of-state issued sales tax permit.
Note; Mississippi accepts the use of out-of-State Seller ID.
This means that Resale Businesses seeking to make sales-tax-free purchases to be delivered to a Mississippi address, can use a valid sales tax permit issued in Mississippi or any other US state. The Business just has to present their sales tax permit and ID issued in Mississippi or any other US state to their supplier in order to make sales-tax-free purchases to a Mississippi address.
Since Mississippi does not have a resale certificate but instead requires you to present your vendor with a Mississippi sales tax permit or an out-of-state sales tax permit, you will need to present that vendor with a new sales tax permit every time it is renewed.
Conclusion
This Article shows you a snapshot of the legal fillings and compliance requirements for LLCs that are registered in Mississippi, specifically for LLCs that want to carry on the business of selling and especially for small e-commerce start up LLCs that are registered in Mississippi.
If you are wondering what might be the best State in the United States to register your small business (especially if you are a reseller or an e-commerce business), we have written this Article, where we go over our most recommended states for registering a business in the United States, if you want to pay less LLC filling and legal compliance fees, if you want less state imposed taxes and if you want to do less periodic legal paperwork required to maintain your LLC status.
