Taxes and incentives \ incentives
State Incentives
Momentum Mississippi
The process to improve Mississippi’s economic incentives began two years ago with the work of the comprehensive Blueprint Mississippi study. It shifted into high gear with the formation of Momentum Mississippi, which adopted the Blueprint recommendations as its foundation.
Momentum Mississippi was built upon the original Momentum Mississippi proposed legislation and helped address three recommendations of Blueprint Mississippi:
Identify and pursue high value, high growth industry targets in both manufacturing and services; align incentives and resources around these targets.
Increase public and private research and development funding and improve the effectiveness of technology transfer and capital accessibility programs to help commercialize innovations.
Improve the productivity and profitability of existing businesses through programs that support innovation, technology, and process improvement.
Momentum Mississippi expanded beyond the proposals in the original Momentum Mississippi bill and added $12 million in loans and grants of up to $200,000 for companies that are at risk of losing Mississippi jobs to foreign outsourcing, further enhancing provisions that the Momentum Mississippi legislation was already extending to existing industry.
The passage of Momentum Mississippi resulted in modernizing seven existing incentive programs and created two new incentives. The two new incentives were targeted at assisting existing industry by creating a Manufacturing Investment Tax Credit Program and an Existing Industry Productivity Loan Fund. The legislation also created the Jobs Protection Act designed to assist industries that face job losses due to outsourcing.
The revisions to the seven existing programs will, among other things, make the state more competitive to new and emerging industries that received little consideration under former incentive packages. Now new incentives are available to help attract industries such as call centers, research and development facilities, and corporate/regional headquarter facilities.
New Programs
Jobs Protection Act
Purpose: Provide grants and loans to be used for job retention and to improve productivity and competitiveness.
Eligibility: Funded at $12 million, the industry must have lost jobs or is "at risk" to lose jobs outside the country due to outsourcing and has been operating in the state for a minimum of three years. The grant or loan may not exceed 50% of the total project cost (a grant may not exceed $200,000) and be matched on a one-to-one basis with private funds. Loans will be repaid at a market-based rate. All are subject to strict due diligence by the Mississippi Development Authority and performance agreements.
Manufacturing Investment Tax Credit
Purpose: Establishes a state income tax credit to encourage investment in buildings and equipment.
Eligibility: Manufacturing enterprises that have been operating in Mississippi at least two years, except companies involved with hazardous waste. The credit is limited to $1 million per project; is calculated by multiplying the total new investment by 5%; and cannot exceed 50% of tax liability.
Existing Industry Productivity Loan Program
Purpose: Providing loans to existing industries in order to maintain the global competitiveness of the business.
Eligibility: An existing company must have been operating in the state for a minimum of two years; deploy long-term fixed assets which, through new technology, will improve the company's productivity and competitiveness; the loan may not exceed the lesser of 50% of total project cost or $500,000; jobs cannot be reduced by more than 20%; and the loan will be repaid at a market based rate.
Alternative Energy
Purpose: Providing income tax jobs credit for up to 20 years of $1,000 for every job created by alternative energy projects that use a majority of products or resources produced in the state.
Eligibility: A project must create a minimum of 25 new jobs.
Revised Tax Incentives
Mississippi Business Development Act
Purpose: (1) Provide loans and grants to municipalities, counties and private companies to establish technology-based business and industry; (2) Provide loans and grants to municipalities and counties to help in infrastructure-related improvements, purchase of equipment, and improving public facilities.
Eligibility: Momentum Mississippi expanded the type of businesses under (1) above to include research and development businesses and funded (2) above at $7 million.
Local Property Tax Exemptions
Purpose: Local governments -- municipal and/or county -- can provide property tax exemptions for up to 10 years (except school taxes) to new or expanding enterprises.
Eligibility: Adds data/information processing enterprises and technology intensive enterprises to the list of companies eligible for the exemption.
Sales Tax Exemptions
Purpose: State can provide sales and use tax exemptions for the purchase or lease of equipment; the purchase of component building materials; or fuel sold to or used by a company.
Eligibility: Added to the list of enterprises eligible for the sales tax reductions are (1) data/ information enterprises; and (2) technology intensive companies (defined as employing a minimum of 10 people in full-time jobs of which at least 10% must be scientists, engineers or computer specialists; being a technology company defined by the Mississippi Development Authority; having an average wage 150% above the state average -- depending upon the location in the state -- and providing a basic health care plan to all employees).
Jobs Tax Credit Program
Purpose: An income tax credit for companies that meet minimum job creation standards that varies according to the county's average annual wage and unemployment rate. Revised to be a percentage of payroll, with the credit being 10% of payroll for new jobs in the least developed counties; 5% of payroll in moderately developed counties; and 2.5% of payroll in the most developed counties.
Eligibility: Adds research and development facilities and pilot manufacturing enterprises as eligible for the program.
Advantage Jobs Program
Purpose: Provides a quarterly incentive payment to qualified businesses up to 10 years that is a cash rebate of employee income tax withholding payments made by the business creating new full-time jobs. Thresholds the businesses must meet to qualify vary, depending upon the business location: the number of jobs created and the amount of salary paid as a percentage of the average state or county wage, whichever is lower. The objective is to provide lower thresholds to locate in areas of highest unemployment and lowest average wage. The counties are classified as
- Tier 3 -- The 28 counties having a combination of the highest unemployment rate and lowest per capita income for the most recent thirty-six-month period.
- Tier 2 -- The 27 counties with a combination of the next highest unemployment rate and next lowest per capita income for the most recent thirty-six-month period.
- Tier 1 -- The 27 counties in the state with a combination of the lowest unemployment rate and the highest per capita income for the most recent thirty-six-month period.
Eligibility: The qualified business list was expanded to include data/information processing businesses, manufacturing or distribution enterprises, research and development or a technology intensive enterprise -- all meeting minimum criteria established by the Mississippi Development Authority.
The rebate will become a percentage of payroll instead of a fixed dollar amount per new job -- 90% of employee income tax withholding payments if the average wage paid is at least 175% of the state or county of location average annual wage; 80% if the average wage paid is 125 to 175% of the state or county of location average annual wage; or 70% if the average wage paid is less that 125% of the state or county of location average annual wage.
To qualify:
Data/information processing enterprises must provide salaries on par with the state or county average wage, and create a minimum of 100 new jobs in Tier 3 counties or at least 200 jobs in Tier 1 and Tier 2 counties.
Manufacturing or distribution businesses previously covered in the law must provide salaries of at least 110% of the state or county average wage, invest at least $20 million, and create a minimum of 20 new jobs in Tier 3 counties or at least 50 jobs in Tier 1 and Tier 2 counties.
Corporations and other legal entities previously covered in the law must provide salaries of at least 125% of the state or county wage, and create 10 new jobs in Tier 1 counties and 25 jobs in Tier 1 and 2 counties.
Research/development or technology intensive businesses must provide salaries of at least 150% of the state or county wage and create at least 10 new jobs, regardless of the location.
Rural Economic Development Corporate Income Tax Credits
Purpose: Credit against state income taxes for certain companies for debt service paid under financing agreements entered into with the Mississippi Business Finance Corporation.
Eligibility: Expands the list of eligible companies to include data/information processing, national or regional headquarters, research and development facilities, and technology intensive enterprises or facilities.
Accountability Provisions
Legislative Oversight
A committee will meet quarterly to advise the Mississippi Development Authority but will not have confidential information about a project. The Governor, Lieutenant Governor, and Speaker of the House will appoint two committee members each.
Annual Report
The Mississippi Development Authority is required to make an annual report on the net economic impact of the incentives to the Secretary of State.
Illegal Immigrants
No company convicted of intentionally violating laws on hiring illegal immigrants can receive benefits; companies benefiting from incentives and are later convicted must repay the state or local government.
Equitable Distribution
The Mississippi Development Authority must attempt - but not mandated - to provide equitable distribution of benefits among the state's congressional districts.
