Corporate tax loophole gets a look

Legislation is expected to be introduced in the House to close the loopholes that allow the large companies to avoid paying corporate taxes.

They avoid paying the 5 percent tax by a complex method that allows them to write off expenses, such as paying rent on their logo, to another out-of-state company where there is no corporate tax.

Closing the loophole could provide needed dollars to deal with the state’s ongoing budget woes. But it also could be viewed as controversial.

House Ways and Means Chair Percy Watson, D-Hattiesburg, held a hearing on the issue last week, but it is unclear whether he will want to tackle what many might label as a tax increase in an election year.

“It is something we will certainly look at,” Watson said. “We will be very deliberative and see if it is something we should discuss.”

Some, such as Reps. John Moore, R-Brandon, and Mark Formby, R-Picayune, questioned the wisdom of placing an additional tax on large employers, perhaps costing the state jobs at a time when many people are having a difficult time finding work.

NEMS
1/23/11