Lawmakers pass bills to increase corporate tax breaks
Published: January 31,2014
Tags: Brad Mayo, coroprate tax break, Delbert Hosemann, House Bill 778, House Bill 784, House Bill 799, incentive, income tax, Jeff Smith, Kathy Gelston, Mississippi Legislature, Revenue Department, Secretary of State's Office, state government, State of Mississippi, task force, tax, Ways and Means Committee
JACKSON — Businesses could be in line for more incentives in Mississippi, in addition to the more than $100 million in new tax breaks the Legislature has passed over the past two years.
The House Ways and Means Committee passed three bills yesterday that would increase the use of corporate-income-tax breaks for companies that relocate or expand in Mississippi. One of those bills would allow companies to give unused tax credits to their employees to cut down personal income taxes.
The committee also passed a bill that would restrict the state’s ability to keep companies from sheltering their income from taxation by assigning it to subsidiaries in states that don’t have corporate income taxes, such as Delaware.
The bills go to the full House for further debate.
House Bill 784 allows a business to take a tax credit for expenses related to expanding or relocating employees to Mississippi, while House Bill 785 creates an income tax credit for companies that relocate a regional or national headquarters, creating at least 20 jobs. Each tax credit would be limited to a cumulative $1 million to be claimed by all businesses. Most corporate income in Mississippi is taxed at a 5 percent rate, which means each credit would exempt a total of $20 million in corporate profits per year from taxation.
The measures were developed by a task force created by Secretary of State Delbert Hosemann. Mississippi Development Authority Chief Financial Officer Kathy Geltson said the state’s economic development agency supports the bills. However, she noted that many times new businesses accumulate income tax credits they are unable to use because startup operations often run at a loss for several years.
“In general, we find that income tax credits are not always the strongest incentives for companies,” Gelston said.
But House Bill 778 could make tax credits much more effective by allowing companies to pass up to $1,000 worth of credits per year to various employees. That would allow each employee to shelter $20,000 worth of income from Mississippi income taxes.
State Rep. Brad Mayo, R-Oxford, handled the bills on behalf of their sponsor, House Ways and Means Committee Chairman Jeff Smith, R-Columbus. Mayo said no estimates of the cost of House Bill 778 have been prepared. Fiscal notes showing a bill’s financial impact are supposed to be mandatory.
Finally, House Bill 799 would limit the Revenue Department’s ability to order companies to file their taxes as combined returns, showing all their business activity nationwide. The department would have to provide “clear and convincing evidence” that a company was shifting income among subsidiaries before ordering a combined return for all subsidiaries to be filed.
To sign up for Mississippi Business Daily Updates, click here.
Top Posts & Pages
- Source: Bryant has offered Glenn McCullough MDA job
- College Board names Glenn Boyce as higher education chief
- TRANSITION AT THE MDA — Is Mississippi better off than it was 3 years ago?
- (WITH VIDEO) Funding secured for Capitol Art Lofts in downtown Jackson
- Deepwater Horizon Five Years Later — Restoring the Mississippi coast starts with a strong foundation
- Chancery Court’s interpretation of ‘public use’ will guide ruling on Westin money
- PHIL HARDWICK: The third grade reading gate, book buddies and school principals
- COMMERCIAL FINANCE 701: Loans disguised as government bonds (BOANs)
- THE SPIN CYCLE — Key results from Pew’s social media survey