By The Numbers...

This section provides information on the following tax topics: property taxes, state taxes, corporate income tax, corporate franchise tax, state unemployment compensation tax, workers' compensation rate, personal income tax, jobs tax credit, property tax exemptions, and excise taxes. For more information visit www.mississippi.org

Job Tax Credits

Eligible employers in Mississippi who create a designated number of full-time jobs are eligible for a five-year jobs tax credit. In Tunica County, if 20 or more new jobs are created, tax credit is $500 per job annually.

 

National or regional headquarters locating in Mississippi are eligible for a five-year, $500 tax credit for each full-time position created. A minimum of 35 jobs is required.

A 25 percent income tax credit is offered to a manufacturer which participates in an employer- sponsored retraining program through a community/junior college.

 

A sales and use tax exemption equal to one-half of the total tax liability is available to qualified businesses on purchases of component building materials to be used in the construction or expansion of a building. A sales and use tax exemption equal to one-half of the total tax liability is also available on qualified purchases of new machinery and equipment.

Property Tax Exemptions

By state statute, Tunica County and the Town of Tunica may grant an exemption on real and personal property taxes, except school taxes. The granting of this exemption will be considered on an individual basis, and factors such as employment and capital investment are considered. The Tunica tax rate is the lowest in Mississippi without exemptions.

 

Eligible enterprises include warehouse and/or distribution centers, manufacturers, processors, refineries, research facilities, regional and national headquarters, movie industry studios and air transportation and maintenance facilities.

 

By taking advantage of Mississippi's Free Port Warehouse law, manufacturers and distributors can be exempt from property taxes on finished goods stored in a licensed Free Port Warehouse that are shipped outside of the state.

Tax Incentives

Jobs Tax Credit: Provides a five-year credit to the company's state income tax bill for each new job created by a new or expanded business, effective for years two through six after the creation of the job. Businesses which create at least 20 new jobs receive $500 per new job.

Research & Development Jobs Tax Credits: Provides an additional five-year tax credit of $500 per year for each net new research and development job created by new or expanding businesses, effective for years two through six after the creation of the job. There is no minimum number of research and development jobs required to be eligible for credit. To qualify for this credit, a business must first meet Mississippi Tax Commission regulations defining the eligible research and development jobs.

 

Headquarters Jobs Tax Credit: Provides an additional five-year tax credit of $500 per year for each net new job created by the transfer of a national or regional headquarters. This credit is effective for years two through six after the creation of the job.

 

Child Care Tax Credit: Provides a tax credit to new or existing businesses that provide or contract for child care for employees during the employee's work hours; credit is equal to 25 percent of qualified expenses of the child care. The child care facility must have an average daily enrollment of at least six children who are 12 years of age or less in order to qualify for this tax credit. Facilities must be certified by the state Department of Health.

Industrial Development Revenue Bond Program

 

The Industrial Development Revenue Bond Program reduces the interest costs of financing projects for companies through the issuance of both taxable and tax-exempt bonds. Additionally, ad valorem and sales tax exemptions are granted in conjunction with this type of public funding.

 

The bonds must be secured by an irrevocable, direct-pay letter of credit or other credit enhancement acceptable to the issuing authority.

 

The proceeds of a bond issue may be used for the acquisition and construction of real property, machinery and equipment, capitalized interest, reserve funds, and a limited amount of the cost of issuance in accordance with provisions of the Internal Revenue Code.

 

Although there is no restriction on the amount of taxable debt which may be incurred, there is a $10 million cap on tax-exempt financing. The maximum term of a bond issue will be equal to 120 percent of the average life of the financed assets or 30 years, whichever is less. The interest rate will be determined by the bond purchaser. The borrower will pay the cost of issuance and any other applicable fees.

Small Enterprise Development Program

 

The issuance of State General Obligation Bonds provides funds for manufacturing and processing companies to finance fixed assets, including land, buildings, new machinery, and new equipment at below-market interest rates for terms of up to 15 years.

 

Although a company may qualify for more than one loan under this program, the aggregate amount loaned to any company cannot exceed $2 million. Interest rates on these loans are equal to the net interest rate on the bonds issued by the state plus a serving fee. The borrower will pay the costs of issuance and any other applicable fees. A project must create a minimum of 10 jobs, and loans cannot exceed 90 percent of the market value of the financed assets. Companies participating in the program will be required to obtain a bank letter of credit guaranteeing the loan.

 

Rural Economic  Development Assistance Program

 

Companies financing projects through the Small Enterprise Development of Industrial Revenue Bond Programs may be eligible to participate in the Rural Economic Development Assistance Program. The program allows eligible companies to receive credits on Mississippi corporate income taxes.

 

Mississippi corporate income tax credits will be granted at the end of a company's fiscal year and will be based on the Mississippi income liability at that time. The amount a company will be required to pay in Mississippi income tax will be reduced by the amount of debt service paid during the past year.

Minority Surety Loan Program

 

Program enables minority contractors not meeting the surety industry's standard underwriting criteria to obtain bid and performance bonds on contracts with state agencies and political subdivisions in Mississippi. With successful completion of contract guarantees under the program, coupled with management and technical assistance by the program administrator and others, minority contractors will grow in experience, management skills and financial stability sufficient to obtain surety bonding on their own. Maximum bond guaranty is 75 percent of contract bond amount or $112,500, whichever is less. A contractor may have more than one guaranteed bond as long as total guarantees do not exceed $112,500.

 

A contractor applicant must be certified with the Minority Business Enterprise Division of the Mississippi Development Authority (MDA), have its principal place of business at least one year prior to application, subcontract no more than 75 percent of a qualified contract and show reasonable evidence of inability to secure bonding under normal market conditions.

Minority Business Enterprise Loan Program

 

This program is designed for the purpose of providing funds to socially and economically disadvantaged minority- or women-owned small businesses. To be eligible for assistance, the ownership and day-to-day management of the business must be at least 60 percent minority or female. Loan proceeds may be used for all project costs associated with the establishment or expansion of a minority business, including the purchase of fixed assets or inventory or to provide working capital.

 

The minimum loan is $2,000, and the maximum loan is $250,000. MDA may fund up to 100 percent of a total project of $15,000 or less and up to 50 percent of a total project greater than $15,000. The borrower must inject or have at least 5 percent equity in the project. Repayment terms are determined by the amount of the loan and the collateral securing the debt, and may extend up to 15 years. Interest rates on the MDA portion of the loan are set at below-market rates for the term of the loan. Applications for this program must be submitted to one of the Qualified Entities approved for participation by MDA.

 

The Qualified Entities include the 10 Planning and Development Districts, Community Development Corporations and other similar entities. All applicants must be certified as a woman-/minority-owned business by the Minority Division of MDA prior to funding.

Mississippi Business Investment Act Program

 

improvements which complement investments by private companies.

 

To be eligible for financing under this program, a private company must invest at least $3.00 for every $1.00 it receives in state assistance and must create and maintain new jobs as required by state statute and MDA. The project to be financed must be necessary for the operation of the company, and it must be determined that other financing options are unavailable.

 

The minimum loan amount for a project is generally limited to $500,000 for a term of 10 years or the estimated useful life of the project to be financed, whichever is greater. Rates of interest are set by MDA on a scale based on the number and quality of jobs created.

 

Loan proceeds may be used for acquisition, expansion, or improvement of land, buildings, and infrastructure.

 

Mississippi Major Economic Impact Authority

 

Unique in the nation, this program allows the state, through the issuance of general obligation bonds, to assist local communities in meeting the development requirements inherent in large capital projects, thereby generating an investment in the quality of life in such communities. Funds may be used to improve transportation, education, recreation and medical facilities within 65 miles of a project site. Certain other infrastructure needs are also eligible for financing.

 

Major Economic Impact Authority projects can be new projects or expansions of existing facilities which have a minimum initial investment of $300 million by the private sector or the U.S. government. Eligible projects include industrial or commercial projects, research and development, warehousing, distribution, transportation, processing, mining establishments, U.S. government projects, and tourism facilities.

 

Mississippi Small Business Assistance Program

 

The Mississippi Small Business Assistance Program was established for the purpose of providing funds to qualified entities to establish revolving loan funds to assist in financing small businesses.

 

Qualified entities must be approved by MDA and are defined as Mississippi Planning and Development Districts (PDD's), Small Business Investment Corporations, Community Development Corporations and other similar entities.

 

A small business is defined as any for-profit commercial enterprise with fewer than 100 full-time employees, less than $2 million in net worth, or less than $350,000 in net annual profit, after taxes, during two of the last three years. A company meeting any of the above criteria is eligible to seek assistance under this program. No small business shall receive funding under this program in excess of $100,000 or more than 50 percent of the total project cost.

 

Maximum terms of the loans shall be 15 years for buildings, 10 years for equipment, five years for working capital and three years for inventory. Interest rates cannot be less than 5 percent per annum or more than 4 percent above the Federal Reserve discount rate plus servicing fee. Small businesses should contact a qualified entity in their area for application.

 

Agribusiness Enterprise Loan Program

 

Designed to encourage the extension of conventional financing by lending institutions, this loan provides interest-free loans to agribusinesses. An eligible agribusiness is any aquaculture-, horticulture-, or agriculture-related industrial, manufacturing, research and development or processing enterprise.

 

Maximum loan is 20 percent of the total project cost or $200,000, whichever is less. Proceeds may be used to finance buildings and equipment and for costs associated with the purchase of land (appraisals, title searches, etc.). However, proceeds cannot be used to purchase land. All loans must be guaranteed 100 percent by a direct lender.

 

FOR A COMPLETE LIST OF ALL INCENTIVES, LOANS, AND PROGRAMS, PLEASE VISIT MISSISSIPPI DEVELOPMENT AUTHORITY

 

1301 Main Street

P.O. Box 1888

Tunica, MS 38676

 

662-363-2865

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