Mississippi bills provide tax credits for job shifts, HQ relocation
by Ted Carter
Published: March 14,2014
A number of bills to sweeten Mississippi’s economic development incentives have fallen by the wayside in the 2014 Legislature. A pair of tax credit measures remain in play, however.
Still alive is a bill that gives tax credits of up to $1 million annually for businesses that shift jobs into the state from out of state and another that gives tax credits of up to $1 million a year to companies that relocate regional or national headquarters to Mississippi.
Both HB784 and HB785 have passed the House by wide margins and await votes in the Senate Finance Committee. The bills have until March 18 to get to the full Senate for a vote.
A third bill, HB778, authorizes businesses that qualify for certain tax credits to pass the credits on to employees. Like the others, it is the Senate Finance Committee. But unlike the others, HB788 had a companion Senate bill that the Finance Committee killed on Feb. 27. It most likely awaits the same fate.
Designed to encourage workforce relocations into Mississippi, HB784 authorizes income tax credits for any permanent business that brings jobs to Mississippi from another state. The amount of credit based on each new job created is greatest if the county in which the increase occurs has high unemployment and low per-capita income.
For instance, Tier 3 counties in Mississippi have the highest rates of joblessness and the lowest per capita yearly incomes. The legislation gives businesses relocating into Tier 3 counties income tax credits of $2,000 per new employee annually for up to five years, beginning with years two through six after creation of the job.
The credit goes only to businesses in the Tier 3 counties that add at least 10 jobs. What’s more, net new employment in the tax credit years must stay above 10 workers for the five years.
Businesses that add jobs from out of state in Tier 2 counties, which the state classifies as having the second highest unemployment rates in the state and second lowest per-capital annual income levels, get tax credits of $1,000 for each job added. The credit is not allowed if the business’s net workforce increase drops below 15 during the credit period.
Jobs added in the more affluent Tier One counties are eligible for annual tax credits of $500 for the five years. A business would have to add 20 jobs to reach the tax credit threshold and maintain that level of new jobs for the five years of credits.
HB785 also applies the county tier levels in adjusting the amount of tax credits granted for headquarter relocations.
Companies that move regional or national headquarters into Tier 3 counties get a tax credit of $2,000 annually for each net new full-time worker for five years, beginning with years two through six. The business must increase its employment in the Tier 3 county by at least 10 workers and maintain that level for five years.
Businesses that relocate their HQs to Tier 2 counties receive a tax credit of $1,000 for each net new job. The business must increase its workforce by at least 15 people to get the credits and must maintain that level of workforce for the five years of the credit.
Relocations into Tier 1 counties provide eligible businesses annual tax credits of $500 for each new worker for five years. The business has to increase employment 20 workers and maintain that level for at least five years.
Legislators have killed a handful of other economic development measures, including:
>>>H9, which would have exempted certain small inventory from ad valorem taxes;
>>>HB290, which would have provided sales tax rebates for hotel repairs and renovations;
>>>HB1233, which would have renewed sales tax rebates for retail developments such as outlet malls;
>>>HB732, would have provided loan guarantees to Mississippi-based feature film production companies.
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