Section 35-6-03-06-104.02 - Business activityMost people transact some business in their home, such as writing a check to pay a household expense or having a garage sale. The law does give some definitions as to business activity that will limit or even deny homestead exemption.
1. allowed Property occupied by a family group wherein business activity is conducted; however, the assessed value of the property associated with the business activity must be less than one-fifth (1/5) of the total assessed value of the home.
2. allowed in part If the assessed value of the property associated with the business does not exceed one-fifth of the total assessed value of the home and the property is occupied by a family group that houses a full time business, one-half (1/2) of the eligible exemption may be allowed.
3. disallowed a. Property occupied by a family group where any part is used by anyone for business purposes except as stated in the above two paragraphs is not eligible for homestead exemption. Property occupied by a family group where any part is used as a gin, sawmill, store, gasoline station, repair shop, manufacturing or processing plant, hotel, motel, tourist court, apartment house with no more than two (2) apartments, and the like are specifically ineligible for homestead exemption.b. If it is possible to split the parcel into the residence and the business, this would be an ideal way to handle a business in the home. In this way the residential parcel may be assessed as a residence only and the business parcel can be assessed as a business.c. EXAMPLES: i. A beauty shop is located in the home in a room where the family has their washer and dryer. There is a sink and hair dryer and a chair for the customers. If the assessed value of this small business and equipment is less than one-fifth (1/5) the total value of the home, this business would not effect the amount of homestead. If this business is the full-time occupation of the owner, the homestead is limited to one-half (1/2) of the exemption allowed.ii. A person has a small grocery store in his house. The store is on the first floor and the family resides on the second floor. The homestead exemption is disallowed because grocery stores are specifically excluded from the definition of eligible homestead property by Section 27-33-21(b).iii. A person has a small store in the front of his house. There is a wall separating the store from the rest of the house. The parcel is split down this wall and the owner is assessed on a residential parcel which can receive the 10% assessment rate with homestead exemption and a business parcel which receives the 15% assessment rate.35 Miss. Code. R. 6-03-06-104.02