Bill’s demise ends state sales tax rebates for retail development
by Ted Carter
Published: February 21,2014
Mississippi’s tourism tax development incentives failed to gain enough legislative support for renewal last week and will expire July 1, ending the state’s practice of awarding tens of millions of dollars as incentives for development of shopping malls and retail plazas.
The Mississippi Development Authority so far has awarded up to $155 million in potential subsidies for three shopping malls since legislators widened the sales tax rebate program last year to include “cultural retail attractions,” or what are more commonly known as retail centers and shopping malls.
Under the terms of the law, the state returns 80 percent of sales taxes collected at a development over 10 years, until the total collected reaches 30 percent of the construction price.
Lawmakers this week declined to extend the tax credits, thus letting them run out on July 1. House Bill 1233, sponsored by Rep. Rita Martinson, R-Madison, would have extended the program by three more years. After a lawmaker questioned the bill last week, it was moved to the bottom of the House calendar, where it remained without a call up.
Martinson said in an interview with The Associated Press she thinks incentives have been helpful, but conceded there was some sentiment to let the lures run out.
“We might even think about letting it go,” she told AP. “It might be at the point to sit back and see what we’ve done.”
State Sen. David Blount, who does commercial leasing for retail space, said he is glad to see the state cease creating an unlevel playing field for retail businesses. “It’s favoritism of one business over another,” the Jackson Democrat said.
Many economists also voice doubts about subsidizing retail development as well. Good Jobs First, a nonprofit group that is skeptical of business subsidies, is particularly critical of giving money to retailers, saying they don’t pay well or create spinoff jobs, the AP reported.
“Building new retail space doesn’t grow the economy, it just moves sales and lousy jobs around,” the group writes.
The first retail development to qualify for the widened incentives was Pearl’s Outlets of Mississippi, where Spectrum Capital could get up to $24 million of its $80 million investment back. That mall opened in November.
Since then, Memphis developers have won certification for the proposed Outlet Shops of the Mid-South in Southaven, which could get $34 million of its $113 million construction cost.
Now, the third and largest development has been certified. CBL & Associates has been approved for up to $96.3 million of a projected $321 million investment for the Gulf Coast Galleria, which it hopes to build in D’Iberville, according to the AP.
MDA has also certified developers of a proposed Westin hotel in downtown Jackson to collect up to $15.7 million from their proposed $52.3 million investment. Hotels, museums and other tourist attractions were already eligible for the rebates before last year, but may not reach the 30 percent ceiling. Jackson’s King Edward Hotel had only collected $1 million of up to $19.5 million by the middle of 2013.
Through mid-2013, the program had paid out only $20.8 million. Of that, almost 75 percent went to another stage of the Pearl development including a Bass Pro Shops store and the Trustmark Park baseball stadium, AP reported.
To sign up for Mississippi Business Daily Updates, click here.
One Response to “Bill’s demise ends state sales tax rebates for retail development”
Top Posts & Pages
- Molpus closes Fund after more than $662M in commitments
- Realtors chooses Nita Wingard
- DeSoto County Supervisor Lee dies in ATV accident on his birthday
- No debate, but Cochran and Childers lobby for votes for Senate
- Politics of paying for transportation: Hand wringing and a lot of talk
- Entergy agrees to cut $35M from its new rate plan
- MSU reminding fans that drones are prohibited at football games
- Kemper County plant will cost at least another $496M to complete
- Ford Foundation gives to UM for new science building