AN ACT TO PROVIDE A STATE INCOME TAX CREDIT FOR TAXPAYERS WHO ARE ACTIVE DRILLING MEMBERS OF THE ARMY NATIONAL GUARD OR AIR NATIONAL GUARD AND ELIGIBLE FOR AN EXEMPTION FROM GROSS INCOME FOR NATIONAL GUARD COMPENSATION UNDER SECTION 27-7-15, MISSISSIPPI CODE OF 1972; TO PROVIDE THE AMOUNT OF THE CREDIT; TO PROVIDE THAT IF THE AMOUNT OF CREDIT CLAIMED BY A TAXPAYER EXCEEDS THE AMOUNT OF INCOME TAX IMPOSED UPON THE TAXPAYER FOR THE TAXABLE YEAR, THEN THE TAXPAYER SHALL RECEIVE A REFUND FROM THE DEPARTMENT OF REVENUE FOR THE AMOUNT OF SUCH EXCESS; AND FOR RELATED PURPOSES.
Summary
House Bill 1256 would create a refundable Mississippi income tax credit for taxpayers who are active drilling members of the Army National Guard or Air National Guard and who already qualify for the existing gross income exemption for National Guard compensation under Section 27-7-15(4)(m). The credit amount is set at $650 per eligible taxpayer.
The bill also specifies that if the credit exceeds the taxpayer’s income tax liability after other allowable credits, the excess must be refunded by the Department of Revenue. The measure would be codified as a new section in Title 27, Chapter 7 of the Mississippi Code and would take effect January 1, 2026.
Impact
HB1256 would amend Mississippi’s income tax laws by adding a new refundable credit for a defined group of National Guard members. It would reduce state income tax liability for eligible Army National Guard and Air National Guard members and could result in direct refunds for taxpayers whose credit exceeds their tax due. The bill does not alter the underlying gross income exemption for National Guard compensation, but it builds on that existing provision and would require the Department of Revenue to administer the new credit and refunds.
Sentiment
The available context suggests generally favorable treatment of the bill, with the caption framing it as a tax benefit for active drilling National Guard members and no recorded committee opposition, votes, or transcript debate in the provided materials. The measure appears to be a targeted recognition of military service through the tax code, which typically draws supportive sentiment. Because no committee discussion or vote history is included, there is no documented public disagreement in the supplied record.
Contention
The main policy issue inherent in the bill is fiscal: it creates a refundable tax credit, which means the state would forgo revenue and could issue refunds even when a taxpayer has little or no income tax liability. Any concern would likely center on the cost to the treasury and whether the benefit should be structured as a nonrefundable credit, deduction, or direct exemption instead. No specific objections, amendments, or opposing viewpoints are included in the provided materials, so any contention is inferred from the bill’s tax expenditure nature rather than from recorded debate.