One piece of legislation Secretary of State has included in his business law reforms package aims to make Mississippi more competitive with its northerly neighbor in attracting corporate headquarters.
It had not been filed as of Wednesday of last week. What the bill would do is offer companies that move their headquarters to Mississippi a tax credit equal to 50 percent of the relocation costs.
Hosemann said in early January that Tennessee offers a similar tax credit, and it puts that state ahead of Mississippi in the race to attract new industry.
Recent hotbeds of economic development – Tupelo, North Mississippi near Memphis, Jackson and the Golden Triangle – fare well on other factors companies consider when searching for potential headquarters sites.
“We were ok on our cost of labor, access to affordable energy, water, transportation,” Hosemann said. “We fit very nicely. What we didn’t have was a relocation tax credit, something Tennessee does have.”
Based on the research of a committee Hosemann formed to study the issue, Hosemann said Tennessee has been able to attract between 20 and 30 corporate headquarters since the program was instituted. Tennessee’s law offers an expense credit ranging from $10,000 to $100,000 per job created by a corporate headquarters’ arrival. Mississippi’s law only allows for a five-year tax credit that maxes out at $2,000 per new position, provided the company creates a minimum of 35 new jobs within a year of its relocation. If amended, Mississippi’s law would become most similar to Indiana’s.
Several lawmakers contacted by the Mississippi Business Journal would not comment on the proposal since the bill had not yet been filed.
“In some instances, it cost as much as $100,000 for a headquarters to leave St. Louis, for example, and move their employees here,” Hosemann said.
The credit would only apply to companies that move their corporate headquarters here. Expanding an existing facility or building a new one would not trigger eligibility.
The credit would also apply to companies whose corporate headquarters are already in Mississippi, and that buy another company and move it headquarters here. Transactions of that nature have increased as the economy begins its snails-pace recovery from the recession; they have been especially prevalent within the banking industry.
“The best companies we can get are the ones we already have here,” Hosemann said.