If you own a business in Mississippi, you’ve got a ton of state resources at your disposal. Mississippi has a wide array of tax incentive programs for all types of businesses, from small retail shops to large enterprises.
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Below is a list of tax incentives, tax credits, tax exemptions, and rebates available to business owners who work in Mississippi.
Business tax incentives in Mississippi
Jobs Tax Credit
The Jobs Tax Credit is an income tax credit available to businesses in certain industries that create new jobs. Businesses in the following industries are eligible: manufacturing, processing, distribution, research and development, wholesaling, and warehousing.
The amount of credit a business receives depends on its location in Mississippi:
- In Tier 1 (the most developed areas), businesses have to create at least 20 new jobs a year to get a 2.5% payroll credit per job
- In Tier 2 (moderately developed areas), businesses have to create at least 15 new jobs a year to get a 5% payroll credit per job
- In Tier 3 (less developed areas), businesses have to create at least ten new jobs a year to get a 10% payroll credit per job
Mississippi also offers a Jobs Tax Credit for Economically Distressed Communities. Businesses operating in these areas can get a credit equal to 10% of the payroll of each new full-time job they create.
To qualify, they have to create at least ten new full-time jobs within a year and prove that they’re located within an area where 30% of the residents are below the national poverty level and where the unemployment rate is one and one-half times the national average.
There are other subsets of the Jobs Tax Credit, including:
- The Jobs Tax Credit for Brownfields, available to businesses that create new jobs to restore contaminated property or brownfields
- The Jobs Tax Credit for Alternative Energy Suppliers, available to businesses engaged in the manufacture or production of alternative energy that creates new jobs
- The Jobs Tax Credit for Upholstered Household Furniture Manufacturer, available to businesses that manufacture upholstered household furniture and create new jobs
Learn more about the Jobs Tax Credit here.
National or Regional Headquarters Tax Credit and National or Regional Headquarters Relocation Tax Credit
The two headquarters tax credits incentivize businesses to either expand their regional or national headquarters in Mississippi or relocate their company headquarters from outside the state to Mississippi. To qualify for the credit, a business has to create at least 20 new headquarters jobs.
The credit amounts are:
- $500 for each new full-time employee
- $1,000 for each new full-time employee whose salary is 125% of the average annual state wage
- $2,000 for each new full-time employee whose salary is 200% of the average annual state wage
Research and Development Skills Tax Credit
The Research and Development Skills Tax Credit incentivizes businesses to locate full-time positions that require research and development skills—like chemists and engineers—within Mississippi.
The credit amount is $1,000 for each full-time employee requiring research and development skills. That’s defined as someone who has a bachelor’s degree in a scientific or technical field from an accredited university, employment in the employee’s area of expertise, and compensation of the professional level with two years of job-related experience.
Businesses don’t have to meet a minimum number of jobs to create to qualify for the credit, but they do need to increase their employee headcount consistently.
Related: What’s the federal research and development tax credit?
Ad Valorem Tax Credit
The Ad Valorem Tax Credit is an income tax credit available to businesses in manufacturing, processing, distribution, wholesaling, and retail. The credit is equal to the amount of ad valorem tax a Mississippi business pays on the commodities, raw materials, works-in-process, products, goods, wares, or merchandise held for resale.
This includes any ad valorem tax paid to a county, city, school district, levee district, or any other taxing authority of the state. For 2016 and all tax years afterward, the credit is limited to the lesser amount of the actual ad valorem taxes paid or the amount of income taxes due that are attributable to the location.
Employer-Provided Dependent Care Tax Credit
Mississippi gives businesses an income tax credit for providing daycare to their employees’ dependents during employees’ working hours. The Mississippi Department of Health has to sign off on the daycare programs to ensure that they meet the department’s requirements.
The credit amount is equal to 50% of the costs of providing dependent daycare for employees.
Export Port Charges Tax Credit
The Export Port Charges Tax Credit is available to businesses that export cargo through port facilities at any Mississippi state, county, or municipal ports or harbors. The credit is equal to the charges on export cargo paid by the business for receiving into the port, handling to a vessel, and wharfage.
Businesses can use the credit to offset 50% of their income tax liability.
Import Port Charges Tax Credit
The Import Port Charges Tax Credit is available to businesses that import cargo through certain Mississippi ports. The credit is equal to the charges on import cargo paid by the business for receiving into the port, handling to a vessel, and wharfage.
To qualify for the credit, the business must have established its US headquarters in Mississippi and have at least five permanent employees at the headquarters location. The business also has to have a minimum capital investment of $2 million.
The maximum cumulative credit a business can claim depends on its employee headcount:
- $1 million if the business has between five and 25 permanent full-time employees at its headquarters
- $2 million if the business has between 26 and 100 permanent full-time employees at its headquarters
- $3 million if the business has between 101 and 200 permanent full-time employees at its headquarters
- $4 million if the business has over 200 permanent full-time employees at its headquarters
Airport Cargo Charges Tax Credit
The Airport Cargo Charges Tax Credit is available to businesses that use Mississippi airport facilities to import or export cargo. The credit is equal to the charges on the import or export of cargo paid by the business for receiving into the airport, aircraft marshaling or handling fees, and aircraft landing fees.
To qualify for the credit, the business must have established its US headquarters in Mississippi and have at least five permanent employees at the headquarters location. The business also has to have a minimum capital investment of $2 million.
The maximum cumulative credit a business can claim depends on its employee headcount:
- $1 million if the business has between five and 25 permanent full-time employees at its headquarters
- $2 million if the business has between 26 and 100 permanent full-time employees at its headquarters
- $3 million if the business has between 101 and 200 permanent full-time employees at its headquarters
- $4 million if the business has over 200 permanent full-time employees at its headquarters
Broadband Technology Tax Credit
The Broadband Technology Tax Credit is an income tax credit available to telecommunications businesses in Mississippi. Eligible telecommunications companies can get a credit for investing in the infrastructure needed to develop high-speed access to the internet.
The credit amount is a percentage of the cost of the equipment they deployed and depends on which Mississippi tier the business is located in. Tier 1 telecommunications businesses can get a 5% credit, Tier 2 businesses can get a 10% credit, and Tier 3 businesses can get a 15% credit.
Manufacturing Investment Tax Credit
Mississippi’s Manufacturing Investment Tax Credit is available to Mississippi manufacturers that have invested at least $1 million in buildings or equipment used in the manufacturing enterprise. The credit amount is equal to 5% of the eligible investments the manufacturer makes.
To qualify, a manufacturer needs to have operated in Mississippi for at least two years.
Historic Rehabilitation Income Tax Credit
The Historic Rehabilitation Income Tax Credit is available to businesses that rehabilitate a designated historic structure or property in a certified historic district within Mississippi. The credit amount is equal to 25% of the costs of rehabilitation if the costs exceed $5,000.
A certified historic structure is one that’s:
- Listed individually on the National Register of Historic Places;
- Determined to be eligible and will be listed by the United States Department of the Interior within 30 months of claiming the credit or
- Designated a Mississippi Landmark by the MDAH.
Eligible Charitable Business Contribution Tax Credit
Businesses that make voluntary cash contributions to eligible educational services charitable organizations (ESCO) can take a tax credit against their income tax, insurance premium tax, or insurance premium retaliatory tax. ESCOs are organizations that provide teacher-led instruction, tutoring, or training to help students learn.
The amount of credit is limited to 50% of the taxpayer’s total income tax liability, 50% of the taxpayer’s total insurance premium tax liability, and 50% of the total real property ad valorem tax liability.
The tax credit may be carried forward for five (5) years.
Mississippi Advantage Jobs Incentive Program
Mississippi’s Advantage Jobs Incentive Program is designed to encourage businesses to create new high-quality jobs and stimulate their local economies. All businesses in Mississippi—except retail establishments and gaming businesses or casinos—are eligible to apply.
To qualify, a business needs to meet the below criteria:
- Create at least 25 new direct jobs with salaries exceeding the average annual wage of the state or of the county in which the business is located, whichever is lower
- Create the new jobs within 24 months of being certified
- Provide a basic health benefits plan for all employees within 180 days of the date the business receives their first incentive payment
Motion Picture Production Incentive
The Motion Picture Production Incentive encourages production companies to set their entertainment projects—and incur production expenses—in Mississippi.
Companies that spend at least $50,000 in base investment expenses (including purchases of goods and services, food, rentals, equipment, etc.) in Mississippi can get a rebate for 25% of their base investment. Mississippi residents can get a 30% rebate for payroll and employee benefits costs.
The following types of productions can qualify for the credit: nationally distributed motion picture, video, DVD, television program or series, commercial, or computer or video game.
SMART Business Rebate
The Strengthening Mississippi Academic Research Through (SMART) Business Rebate is available to investors who incur qualified research costs as part of a research agreement with colleges or research corporations in the state of Mississippi.
Eligible investors can get a rebate for 25% of the qualified research costs, up to $1 million a year.
Economic Redevelopment Act
The Economic Redevelopment Act encourages businesses to restore and develop on and around environmentally contaminated sites—like brownfields—in Mississippi.
Businesses that relocate to or expand within a redevelopment project area can get a rebate on state taxes and fees, including:
- Any sales tax on sales or certain purchases
- All income tax on income earned
- All franchise tax imposed on the value of capital used, invested, or employed
The following business types can qualify for the rebate:
- Manufacturing, processing, assembling, storing, warehousing, servicing, distributing, or selling of any products or goods, including products of agriculture
- Enterprises for research and development
- Retail businesses
- Recreation and hospitality businesses, including restaurants, hotels, and sports facilities
Business tax exemptions in Mississippi
Income Tax Exemption for Growth and Prosperity (GAP) Areas
The Income Tax Exemption for Growth and Prosperity (GAP) Areas is available to businesses in certain industries located in underdeveloped areas of Mississippi. A GAP area is defined as an area where 30% or more of the population is at or below the federal poverty level or where the unemployment rate is 200% of the state’s average unemployment rate.
Businesses that construct new facilities or expand existing ones in a GAP area won’t have to pay state and local taxes for a period of 10 years or until December 31, 2029, whichever is first.
The state and local taxes include:
- Sales and use tax on component materials, equipment, and machinery for the initial construction of a business or an additional expansion of an existing business
- Income tax on income generated by the business in the GAP Area
- Franchise tax on the value of the capital used, invested, or employed by the business in that GAP Area
- Sales and use tax imposed on the lease of machinery and equipment acquired in the initial construction of a business or an additional expansion of an existing business
- Any county or municipal ad valorem taxes except for the school, fire, and police portions of the tax
To be eligible, businesses need to be engaged in one of the following:
- Manufacturing
- Processing
- Assembly
- Storage
- Warehousing
- Service
- Distribution
- Selling products or goods, including products of agriculture
- Research and development
Income Tax Exemption for Clean Energy Business Enterprises
The Income Tax Exemption for Clean Energy Business Enterprises is an income tax exemption available to certain clean energy businesses that locate to or expand within Mississippi. These clean energy enterprises must own or operate a facility that manufactures or assembles systems or components used to generate clean energy.
To qualify for the credit, a clean energy enterprise has to create at least 250 new full-time jobs in Mississippi and make a minimum capital investment of at least $50 million. If they qualify, these companies won’t have to pay state taxes for a 10-year period.
Income Tax Exemption for Aerospace Industry Enterprises
This tax exemption is available to companies that manufacture, assemble, or process products, components, or systems for use in the aerospace industry or that provide research and development or training services to the aerospace industry.
Aerospace companies that invest a minimum of $25 million and create at least 25 new full-time jobs in Mississippi (that pay at least 110% of the state’s average annual wage) will be exempt from paying state taxes for a period of 10 years.
Income Tax Exemption for Data Center Enterprises
This tax exemption is available to data center enterprises that locate to or expand within the state of Mississippi.
Data center companies that invest a minimum of $20 million and create at least 20 new full-time jobs in Mississippi (that pay at least 125% of the state’s average annual wage) will be exempt from paying state taxes for a period of 10 years.
Franchise Tax Exemptions
Mississippi also offers certain eligible businesses and enterprises an exemption from the state franchise tax. The following franchise exemptions are available:
- Franchise Tax Exemption for Growth and Prosperity (GAP) Areas, available to businesses in certain industries located in GAP areas
- Franchise Tax Exemption for Broadband Technology Tax Credit, available to telecommunications companies that deploy broadband technology
- Franchise Tax Exemption for Clean Energy Business Enterprises, available to clean energy enterprises that locate to or expand within Mississippi
- Franchise Tax Exemption for Aerospace Industry Enterprises, available to aerospace companies that locate to or expand within Mississippi
- Franchise Tax Exemption for Data Center Enterprises, available to data centers that make capital investments and create new jobs in Mississippi
Sales and Use Tax Exemptions
Mississippi gives eligible businesses exemptions on paying sales and use tax on certain purchases and property. The following sales and use tax exemptions are available:
- Sales/Use Tax Exemption for Construction or Expansion, available to manufacturers, custom processors, data/information enterprises, and technology-intensive enterprises that construct a new facility or expand an existing one
- Sales/Use Tax Exemption for Transfer of National or Regional Headquarters, available to businesses that create, transfer, or expand their headquarters in Mississippi and create at least 20 new jobs in the state
- Sales/Use Tax Exemption for Bond Financing, available to businesses that have obtained bond financing through the Mississippi Business Finance Corporation
- Sales/Use Tax Exemption for Businesses in Growth and Prosperity (GAP) Areas, available to businesses for component materials, machinery, and equipment used in the initial construction or expansion of the business in the GAP Area
- Sales/Use Tax Exemptions for Broadband Technology, available to telecommunications companies for the purchase of equipment used to deploy broadband technology
- Sales/Use Tax Exemption for Clean Energy Business Enterprises, available to clean energy enterprises that locate to or expand within the state
- Sales/Use Tax Exemption for Aerospace Industry Enterprises, available to aerospace companies for the purchase of component building materials and equipment
- Sales/Use Tax Exemption for Data Center Enterprises, available to data centers that make large capital investments and create new jobs in the state
- Sales/Use Tax Exemption for Businesses in Health Care Industry Zones, available to businesses located in Health Care Industry Zones for the component materials used in the initial construction, addition, or improvement of a healthcare facility, and machinery and equipment for use in such facility
You can learn more about Mississippi’s wide range of tax incentives, credits, and exemptions in the Mississippi Department of Revenue’s comprehensive downloadable guide.
Mississippi city and county tax credits
Some Mississippi cities and counties have their own business tax credits and incentive programs. Search the business development section of your city’s website to find out what your options are.
Business loans and grants in Mississippi
If you’re trying to grow your Mississippi-based business, state financing resources can help. To get started, read through Gusto’s detailed guide to grants and loans in The Magnolia State.
For more helpful advice on running a business in Mississippi, explore these guides:
