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The Gulf Opportunity Zone Act of 2005 provides for Federal incentives to areas of Mississippi affected by Hurricane Katrina that were designated as warranting individual or public and individual assistance.
Summary of Incentives:
• Additional Bonding Authority. To assist in the rebuilding effort, the State is authorized to issue up to $4,919,000,000 of a special class of tax-exempt private activity bonds called GO Zone Bonds. These bonds may be used to finance the acquisition, construction and renovation of commercial real property. This bonding authority expires after December 31, 2010. It should be noted that a business may choose the tax-exempt financing or the bonus depreciation, but not both.
Mississippi counties that are eligible for allocation are:
Adams, Amite, Attala, Claiborne, Choctaw, Clarke, Copiah, Covington, Forrest, Franklin, George, Greene, Hancock, Harrison, Hinds, Holmes, Humphreys, Jackson, Jasper, Jefferson, Jefferson Davis, Jones, Kemper, Lamar, Lauderdale, Lawrence, Leake, Lincoln, Lowndes, Madison, Marion, Neshoba, Newton, Noxubee, Oktibbeha, Pearl River, Perry, Pike, Rankin, Scott, Simpson, Smith, Stone, Walthall, Warren, Wayne, Wilkinson, Winston and Yazoo.
• Allows 50% Bonus Depreciation within the Zone* This incentive allows businesses to claim an additional first-year depreciation deduction equal to 50% of the cost of new property investments made in the Zone. This depreciation allowance applies to software, leasehold improvements, and certain equipment and real estate expenditures. Property must be used in the active conduct of a trade or business. All depreciation deductions are exempt from Alternative Minimum Taxes. This provision applies to eligible real and personal property placed in service in Hancock, Harrison, Jackson, Pearl River and Stone counties through December 31, 2010.
For further details, see the GO Zone Volume Cap Allocation Guidelines, Application for GO Zone Bond Allocation, and the text of the Act available at the Library of Congress website. To request these documents or for assistance, contact the Financial Resources Division at financial@mississippi.org or 601.359.3552.
*This summary of Federal Legislation is intended as a general overview. The Mississippi Development Authority has no control or influence over the content or implementation of this legislation, and does not administer or approve the Bonus Depreciation. This document lists only selected incentives, and does not address all requirements, exclusions and limitations outlined in the act. Eligibility and other requirements related to these incentives should be discussed with the recipient’s tax professionals.
