Tax Credits/Exemptions
Alternative Energy Project
A new income tax credit equal to $1,000 annually for each new full-time job for a period of twenty years from the date the credit begins. The credit shall begin on the date selected by the producer; however, the beginning date shall not be more than five years from the date the producer begins manufacturing or producing alternative energy. Once a producer creates and maintains 25 new full-time jobs, the producer shall be eligible for the credit. Any unused credits can be carried forward for five years. These credits shall be in lieu of the jobs tax, research and development, and headquarters credits.
- An alternative energy project is a business enterprise engaged in manufacturing or producing alternative energy in the state with at least 50% of the finished product being derived from resources or products of the state.
- A producer is a manufacturer or producer of alternative energy through an alternative fuels project.
Existing Manufacturer Credit
A new income tax credit available to a manufacturer that has operated in the state for at least two years and invests at least $1,000,000 in buildings and/or equipment.
- The credit will be 5% of the eligible investment. The credit cannot exceed 50% of the income tax liability in any given year, but any unused credits can be carried forward for five years.
- The maximum credit that may be claimed by a taxpayer on any project shall not exceed $1,000,000.
Reduced Sales Tax Rate for Technology Intensive Enterprises
A new incentive that provides a reduced rate of 1.5% for sales of machinery and parts for plant use only when the machinery and machine parts will used exclusively and directly within the state for industrial purposes, including, but not limited to, manufacturing or research and development activities. It also provides for a rate of 1.5% on electricity, current, power, steam, coal, natural gas, liquefied petroleum gas or other fuel sold to or used by a technology intensive enterprise.
- A technology intensive business is one which employees at least 10 new, full-time jobs and which has at least 10% of its workforce as scientists, engineers or computer specialists. The average wage of all workers shall be at least 150% of the state annual average wage, and the enterprise must provide a basic health care plan to all of its employees.
- Eligible enterprises include a manufacturer of plastics, chemicals, automobiles, aircraft, computer or electronics; a research and development facility, a computer design or related facility, or a software publishing facility or other technology intensive facility or enterprise as determined by the Mississippi Development Authority (MDA).
Sales Tax Exemption
(technology intensive enterprises are now added to an existing exemption)
Sales of component materials used in the construction of a facility and the sales of machinery and equipment not later than 3 months after the completion of construction of the facility may receive a full exemption against sales tax in a
Tier Three county and a one half exemption in a
Tier One or Two county.
Sales Tax Exemption
(data/information enterprises are now added to an existing exemption)
Sales of component materials used in the construction of a facility and the sales or leases of machinery and equipment not later than 3 months after the completion of construction of the facility may receive a full exemption against sales tax in a
Tier Three county and a one half exemption in a
Tier One or Two county.
An existing exemption that allows local governing authorities to exempt all taxes except school taxes for ten years for eligible entities. This exemption applies to land, building, equipment, and certain inventory.
- Data/information processing enterprises and technology intensive enterprises or facilities meeting minimum criteria established by MDA have been added to the list of eligible entities.
An existing income tax credit. This credit has been changed from a dollar per job credit to a percentage of payroll credit. The credit in a
Tier Three county is now 10% of the payroll of the eligible enterprise per year for five years provided that 10 or more new full-time jobs are created; the credit in a
Tier Two county is 5% and a 15 job minimum; and the credit in a
Tier One county is 2.5% with a 20 job minimum.
Rural Economic Development (RED) Credit
An existing income tax credit. RED allows eligible businesses to use the debt service from industrial revenue bonds issued by the Mississippi Business Finance Corporation (MBFC) as a credit for each year for the life of the bonds. The credit cannot exceed 80% of the income tax liability in any given year, but any unused credit can be carried forward for three years.
- Data/information processing enterprises, national or regional headquarters, research and development facilities, and technology intensive enterprises or facilities meeting minimum criteria established by MBFC have been added to the list of eligible entities.
For more information:
Financial Resources Division
Telephone: 601.359.3552
Fax: 601.359.3619
financial@mississippi.org