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Many of the following incentives require prior approval by the appropriate agency
State Income Tax Credits
Sales and Use Tax Exemptions
Property Tax Exemptions
Special Incentives Gulf Opportunity Zone Act of 2005
State Income Tax Credits Jobs Tax Credits
Rural Economic Development (RED) Program Credits for Creation of Research and Development Jobs Investment Tax Credit (Existing Manufacturers) Other Income Tax Credits
Sales and Use Tax Exemptions Exemptions for New and Expanding Industries Mississippi provides certain exemptions from state sales and use taxes for permanent business enterprises engaged in manufacturing, processing, data/information processing, and for technology intensive enterprises. For businesses locating in Clarke, Jasper, Lauderdale, Newton, Scott, and Smith Counties, a one-half exemption of the sales and use tax due is available on eligible purchases of machinery and equipment to be used in an approved new or expansion project. This exemption is not restricted to manufacturing equipment. This exemption is also available on purchases of component building materials to be used in construction. Establishment of National or Regional Headquarters A full exemption on sales and use taxes is available to qualified companies establishing a national or regional headquarters in Mississippi. To qualify for this exemption, a minimum of 35 headquarters jobs must be created.
Any eligible purchases made with industrial revenue bonds issued by the Mississippi Business Finance Corporation can be exempted from sales and use tax in Mississippi. This incentive is also available for purchases made with proceeds from the Small Enterprise Development Program.
Property Tax Exemptions Exemptions for New and Expanding Industries Local authorities may grant an exemption for up to ten years on property taxes for land, building, equipment, furniture and fixtures, raw materials, and work in process for eligible enterprises, whether new or expanding. The exemption does not cover school taxes. Local authorities may grant a freeport warehouse exemption for property taxes on finished goods inventory leaving the state of Mississippi. The exemption may be perpetual or for a defined number of years.
Exemptions for Manufactured Products Local authorities may grant an exemption for up to ten years on property taxes for products including finished goods, held by a manufacturer or distributor. The exemption does not cover school taxes.
Advantage Jobs Act (Cash rebate of up to 4 percent of wages) The Mississippi Advantage Jobs Act provides incentive payments to certain qualified businesses for up to 10 years. The amount of the rebate will depend upon the withholding (for state personal income tax) of the qualified employees and a cost/benefit analysis prepared by the Mississippi Development Authority. The entity must meet several criteria including a target average annual wage to its employees. Benefits which are not subject to income tax are not included in this average. In addition,
Industrial revenue bonds are available for fixed asset financing secured by a bank letter of credit. The bond rates are either variable or negotiated (lender purchased) while the letter of credit terms are negotiated with the bank. The Industrial Development Revenue Bond Program administered by the Mississippi Business Finance Corporation (MBFC) reduces the interest costs of financing projects for companies, through the issuance of both taxable and tax-exempt bonds.
The Small Enterprise Development Program is a composite bond program through MBFC designed to combine several smaller projects together, lowering pro rata issuance costs and providing fixed rate financing at Mississippi’s general obligation bond rate. The loans must be secured by a bank letter of credit and may be used to finance land, buildings, new machinery and equipment. The maximum amount of outstanding debt for a company under the program is $4,000,000. The program is limited to manufacturers and processors and the applicant must create a minimum of ten new, fulltime jobs. However, recent action of the Mississippi Legislature allows most commercial projects located within the Gulf Opportunity Zone to be eligible.
Other state financing includes loans to local governing authorities and companies to construct or improve buildings, provide basic infrastructure, purchase equipment, and provide operating funds.
Grants are available to provide public infrastructure based on the needs of a community and a company. The amount will be dependent upon the size of the project, the assistance the local governing authorities are providing, and the availability of funds.
Special Incentives Clarke County, Jasper County, and Lauderdale County are considered HubZones through the Small Business Administration. This program provides federal contracting preferences for qualified small businesses that locate in the county.
Gulf Opportunity Zone Act of 2005 The United States Congress, in response to the damage from Hurricanes Katrina, Rita, and Wilma, passed the Gulf Opportunity Zone Act of 2005 which provides a number of incentives, many of which can benefit business and industry. These incentives include 50% bonus depreciation for the first year, expanded ability to use tax exempt bond financing, enhanced expensing for small businesses, and an extension of the carryback period for net operating losses attributable to Katrina. Several other incentives are available. A number of businesses are excluded from benefits under the Act, including private or commercial golf courses, country clubs, massage parlors, hot tub facilities, suntan facilities, liquor stores, and gambling or animal racing property. All counties in Mid-Mississippi Development District are eligible for these incentives. For a more detailed explanation, talk to your tax professional. |