Manufacturers’ Ownership of Dealerships

Beginning July 1, 2023, HB 401 states that manufacturers cannot apply for a dealership license at the Mississippi Motor Vehicle Commission.

Why Is This Important to Dealers?

Without this law, any automobile manufacturer (Ford, GM, CDJR, etc.) could form an LLC with the Secretary of State and apply for a dealer’s license. HB 401 prevents an automotive manufacturer from having an unfair competitive advantage and also helps the consumer by preventing monopolies by manufacturers.

What Does the Law Do?

Automobile manufacturers cannot do any of the following:

• Own any ownership interest in, operate or control any motor vehicle dealer or dealership in the state for the same type of classification of motor vehicle that it manufactures or distributes
• Apply for a motor vehicle dealer’s license
• Be licensed as a new motor vehicle dealer in the state

The Tesla corporate-owned store that received a dealer’s license in 2021 will be allowed to keep its current location.

This Is Important to Dealers That Are Putting Charging Stations in Public

HB 1060 will allow dealerships to charge by the kilowatt hour for a customer using a charger located at the store. Without this legislation, it was illegal to resale electricity in Mississippi except for public utilities.

For Dealers Wanting To Fully Expense Long-Term Assets

HB 1733 will allow businesses to fully expense longer-term assets in the year that they were put into service, rather than doing so over time. In 2017, the federal Tax Cuts and Jobs Act temporarily made this possible at the federal level, but that is set to phase back out over the next five years.

Clarification on Taxing Software by the Department of Revenue

SB 2449 preserves the state’s historical approach to taxing these items based on physical location while also addressing many important ancillary and compliance issues. Notably, the legislation codifies the Department of Revenue’s existing regulation that “computer software maintained on a server located outside the state and accessible for use only via the Internet is not a taxable retail sale.”

It clarifies that Mississippi only taxes software that is physically downloaded or delivered into the state and excludes remote cloud-based applications. It takes a similar approach in taxing only those computer software services actually performed within the state, so computer support activities performed remotely would not fall within the scope of the tax.

With the passage of HB 1733, Mississippi businesses will be able to depreciate their assets in a more expedient manner, with no real impact on state revenue.