| ■ | 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 |
| ■ | Exemptions for New and Expanding Industries |
| ■ | Establishment of National or Regional Headquarters |
| ■ | Purchases Through Bonds |
| ■ | Exemptions for New and Expanding Industries |
| ■ | Freeport Warehouse Exemption |
| ■ | Exemptions for Manufactured Products |
| DATA / INFORMATION PROCESSING ENTERPRISES THAT PROVIDE AN AVERAGE ANNUAL WAGE OF 100% OF COUNTY OR STATE WAGE, WHICHEVER IS LESS. | BUSINESSES, INCLUDING MANUFACTURERS, BUT EXCLUDING RETAIL AND GAMING, THAT PROVIDE AN AVERAGE ANNUAL WAGE OF 110% OF THE COUNTY OR STATE WAGE, WHICHEVER IS LESS. | |
| CLARKE, JASPER, LAUDERDALE, NEWTON, SCOTT, & SMITH COUNTIES | Must create 200 new, full-time jobs | Must create 25 new, full-time jobs |
Many of the following incentives require prior approval by the appropriate agency
State Income Tax Credits
Jobs Tax Credits
Jobs Tax Credits are credits taken against Mississippi corporate income tax. These credits range from 2.5% of payroll to 10% of payroll per year for five years. The credits cannot exceed 50% of the income tax liability in any given year, but any unused credits can be carried forward for five years. The credits are taken in years two through six after the new jobs are created.
Companies may opt to monetize the Jobs Tax Credit for job training purposes. When a company opts to monetize the credit, the State provides job training grants to a community or junior college, public university or local workforce investment area in Mississippi to pay costs incurred in training or retraining employees. Grants may cover up to 75 percent of the costs of training or retraining employees and range from $1,000 to $2,000 per job, depending on the county in which the business is located.
To be eligible for the credit or the job training option, a qualified business must create and maintain a threshold number of new, full-time jobs. A company must choose between the Jobs Tax Credit or the job training grant option, and companies must elect to utilize a job training grant before creating any eligible jobs. Qualified companies include, but are not limited to, manufacturing, distribution, data/information processing, and research and development businesses.
Jobs Tax Credits are credits taken against Mississippi corporate income tax. These credits range from 2.5% of payroll to 10% of payroll per year for five years. The credits cannot exceed 50% of the income tax liability in any given year, but any unused credits can be carried forward for five years. The credits are taken in years two through six after the new jobs are created.
Companies may opt to monetize the Jobs Tax Credit for job training purposes. When a company opts to monetize the credit, the State provides job training grants to a community or junior college, public university or local workforce investment area in Mississippi to pay costs incurred in training or retraining employees. Grants may cover up to 75 percent of the costs of training or retraining employees and range from $1,000 to $2,000 per job, depending on the county in which the business is located.
To be eligible for the credit or the job training option, a qualified business must create and maintain a threshold number of new, full-time jobs. A company must choose between the Jobs Tax Credit or the job training grant option, and companies must elect to utilize a job training grant before creating any eligible jobs. Qualified companies include, but are not limited to, manufacturing, distribution, data/information processing, and research and development businesses.
Rural Economic Development (RED) Program
The Mississippi Rural Economic Development Program (RED), administered by the Mississippi Business Finance Corporation (MBFC), is a program designed to provide certain tax benefits for projects which are financed through the Small Enterprise Development Program or the Industrial Development Revenue Bond Program. This program allows a business to receive credits on Mississippi corporate income taxes to help offset the company’s project-related debt service. The annual debt service for a project includes all costs associated with the issuance of bonds, letters of credit, annual service fees and principal and interest payments. Eligible businesses include manufacturers, distribution centers, data/information processing enterprises, national or regional headquarters, research and development facilities, and technology intensive facilities. The eligible business must meet minimum criteria.
A company will be allowed to reduce the amount of state income tax by the amount it pays in annual debt service on the bonds. The credit may be taken up to a maximum of 80 percent of the state income tax liability in each year. Unused RED credits may be carried forward for three years.
The Mississippi Rural Economic Development Program (RED), administered by the Mississippi Business Finance Corporation (MBFC), is a program designed to provide certain tax benefits for projects which are financed through the Small Enterprise Development Program or the Industrial Development Revenue Bond Program. This program allows a business to receive credits on Mississippi corporate income taxes to help offset the company’s project-related debt service. The annual debt service for a project includes all costs associated with the issuance of bonds, letters of credit, annual service fees and principal and interest payments. Eligible businesses include manufacturers, distribution centers, data/information processing enterprises, national or regional headquarters, research and development facilities, and technology intensive facilities. The eligible business must meet minimum criteria.
A company will be allowed to reduce the amount of state income tax by the amount it pays in annual debt service on the bonds. The credit may be taken up to a maximum of 80 percent of the state income tax liability in each year. Unused RED credits may be carried forward for three years.
Credits for Creation of Research and Development Jobs
A state income tax credit is available for creation of any fulltime jobs requiring research and development skills as determined by the Mississippi State Tax Commission. The credit is for $1,000 per year for five years and any unused credit may be carried forward for five years. These may be used in conjunction with any other credit but the total of the jobs tax credit, headquarters credit, and research and development credit cannot exceed 50% of state income tax liability in a given year.
A state income tax credit is available for creation of any fulltime jobs requiring research and development skills as determined by the Mississippi State Tax Commission. The credit is for $1,000 per year for five years and any unused credit may be carried forward for five years. These may be used in conjunction with any other credit but the total of the jobs tax credit, headquarters credit, and research and development credit cannot exceed 50% of state income tax liability in a given year.
Investment Tax Credit (Existing Manufacturers)
A state income tax credit is available to manufacturers that have operated in the state for at least two years and who invest at least $1,000,000 in buildings and/or equipment. The credit is 5% of the eligible investment, and may not exceed 50% of the annual state income tax liability that exists after reduction by any other credits. Unused credits can be carried forward for 5 years. The maximum credit may not exceed $1,000,000 per project.
A state income tax credit is available to manufacturers that have operated in the state for at least two years and who invest at least $1,000,000 in buildings and/or equipment. The credit is 5% of the eligible investment, and may not exceed 50% of the annual state income tax liability that exists after reduction by any other credits. Unused credits can be carried forward for 5 years. The maximum credit may not exceed $1,000,000 per project.
Other Income Tax Credits
Other income tax credits include those for establishment of national or regional headquarters, basic skills training and retraining, production of alternative energy, child/dependent care, and for qualified taxpayers who use Mississippi ports.
Other income tax credits include those for establishment of national or regional headquarters, basic skills training and retraining, production of alternative energy, child/dependent care, and for qualified taxpayers who use Mississippi ports.
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.
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 20 headquarters jobs must be created.
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 20 headquarters jobs must be created.
Purchases through Bonds
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.
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 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.
Freeport Warehouse Exemption
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.
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.
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. 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,
| ■ | The job creation and wage requirement must be met within twenty-four (24) months of an approved application. |
| ■ | The business must furnish a plan to provide any new employees a basic health benefit plan. |
| ■ | No newly created jobs can be excluded when calculating the average annual wage. |
| ■ | The amount available for rebate will be the lesser of (1) the qualified employees’ state personal income tax withholding; or (2) a legal maximum of 4%. This amount is multiplied by 90% if the average annual wage is at least 110% of the county or state wage, whichever is less. |
Financing Programs
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.
Other state financing includes loans to local governing authorities and companies to construct or improve buildings, provide basic infrastructure, and purchase equipment.
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.
Other state financing includes loans to local governing authorities and companies to construct or improve buildings, provide basic infrastructure, and purchase equipment.
Grant Programs
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
Data Center
The State of Mississippi provides a state sales tax exemption for all computing equipment and software used by companies certified as data centers by the Mississippi Development Authority. Both new and replacement equipment qualify for the tax exemption. The certification requires a minimum investment
of $50 million and the creation of at least 50 new jobs paying 150 percent of the average state wage.
The State of Mississippi provides a state sales tax exemption for all computing equipment and software used by companies certified as data centers by the Mississippi Development Authority. Both new and replacement equipment qualify for the tax exemption. The certification requires a minimum investment
of $50 million and the creation of at least 50 new jobs paying 150 percent of the average state wage.
| ■ | Data Center |
Incentives
| ■ | Aerospace Initiative |
| ■ | Clean Energy Initiative |
| ■ | HubZone |
Aerospace Initiative
Mississippi’s Aerospace Initiative Incentives program provides tax incentives to companies that manufacture or assemble components for the aerospace industry or provide research, development or training services for the sector and are looking to locate or expand in the state. These incentives include a 10-year exemption from income and franchise taxes, as well as a sales and use tax exemption for the start-up of the facility. In order to qualify, companies must invest a minimum of $30 million and create at least 100 full-time jobs.
Mississippi’s Aerospace Initiative Incentives program provides tax incentives to companies that manufacture or assemble components for the aerospace industry or provide research, development or training services for the sector and are looking to locate or expand in the state. These incentives include a 10-year exemption from income and franchise taxes, as well as a sales and use tax exemption for the start-up of the facility. In order to qualify, companies must invest a minimum of $30 million and create at least 100 full-time jobs.
Clean Energy Initiative
The Mississippi Clean Energy Initiative program allows the Mississippi Development Authority to certify companies that manufacture systems or components used to generate clean, renewable or alternative energy. This includes nuclear, solar, wind and hydro-generation. The program provides qualifying companies with a 10-year exemption from state income and franchise taxes, as well as a sales tax exemption to establish a plant or expand an existing production facility. To qualify, businesses must commit to invest a minimum of $50 million and create 250 full-time jobs.
The Mississippi Clean Energy Initiative program allows the Mississippi Development Authority to certify companies that manufacture systems or components used to generate clean, renewable or alternative energy. This includes nuclear, solar, wind and hydro-generation. The program provides qualifying companies with a 10-year exemption from state income and franchise taxes, as well as a sales tax exemption to establish a plant or expand an existing production facility. To qualify, businesses must commit to invest a minimum of $50 million and create 250 full-time jobs.
HubZone
Clarke County is considered a HubZone through the Small Business Administration. This program provides federal contracting preferences for qualified small businesses that locate in the county.
Clarke County is considered a HubZone through the Small Business Administration. This program provides federal contracting preferences for qualified small businesses that locate in the county.
| County | New Job Threshold (Annual Avg) | Credit | Job Training Grant Option |
| Clarke, Jasper, Scott, Smith | 15 | 5% of payroll | $1,500 per worker |
| Lauderdale, Newton | 20 | 2.5% of payroll | $1,000 per worker |