Local Tax Abatements
Hinds County and cities within Hinds County can exempt ad valorem (property) taxes for manufacturers who apply immediately after they locate or expand in Hinds County. School district taxes and certain other taxes cannot be exempted.
The following exemptions are available and are based on the economic impact of the project seeking exemption.
10-Year Property Tax Exemptions
(§27-31-101 through §27-31-115)
An exemption from property taxes on land, building, equipment, and certain inventory is available and is valid for up to 10 years. Manufacturers, Wholesalers, processors, research and development, distributor and warehouse facilities, air and transportation maintenance facilities, telecommunications companies, data and information processing companies, computer software development enterprises, recreational facilities that impact tourism, movie industry, and technology intensive facilities qualify for this credit.The related municipal authorities and/or the local board of supervisors must approve this incentive. The exemption may be granted on all property taxes except school taxes, finished goods, and rolling stock.
Property Tax Fee-in-Lieu
(§ 27-31-104)
In instances where an addition or expansion has a true value that exceeds $100,000,000, the local governing bodies may negotiate a fee to be paid in lieu of the calculated property tax. This negotiated fee is valid for 10 years. The fee must be at least 1/3 of the property tax levy, including the property taxes assessed for school districts. The related municipal authorities and/or the local board of supervisors must approve this incentive. All negotiated fees must be given final approval from MDA.
Industrial Revenue Bond Exemptions
An exemption from property taxes on land, building, equipment, and certain inventory is available and is valid for up to 10 years on property purchased with industrial revenue bond proceeds from bonds issued by the Mississippi Business Finance Corporation (MBFC). The related municipal authorities and/or the local board of supervisors must approve this incentive. The exemption may be granted on all property taxes except school taxes, finished goods, and rolling stock.
Free Port Warehouse Exemption
(§27-31-51 through §27-31-61)
Local authorities may grant a freeport warehouse exemption on finished goods inventory leaving the state of Mississippi. The exemption may be for all property taxes and may be perpetual.To be eligible for this exemption, an application to operate as a free port warehouse must first be made to the local governing authorities. The related municipal authorities and/or the local board of supervisors must approve this incentive. To claim this exemption, an inventory of all personal property located in the warehouse as of January 1 must be provided to the local county tax assessor. At year-end, a percentage of all personal property that was shipped to a destination outside the state must be calculated and applied to the property value as of January 1. The result is the maximum exemption that can be taken for the year.
In-State Inventory Exemption
Local authorities may grant a finished goods inventory exemption on inventory that will remain in Mississippi. The exemption may be granted on all property taxes except school taxes, finished goods, and rolling stock, and may be granted for up to ten years.The related municipal authorities and/or the local board of supervisors must approve this incentive.
Growth and Prosperity Program (GAP)
(§57-80-9)
A GAP designation may be awarded to eligible businesses in specific geographic areas of the State that exempts the business from certain property taxes for up to ten years. See details of this incentive under
"Other Incentives."
Broadband Technology Ad Valorem Exemption
(§57-87-7)
The Broadband Technology Tax Credit allows approved businesses to exempt equipment that was purchased for use in the deployment of broadband technology. Equipment eligible for the property exemption is any equipment used to transmit information at a high speed. The value of this equipment is not included in the assessed value calculation. The exemption is available through June 30, 2013, and must be agreed to by the local taxing authorities. The exemption applies to all property taxes except the portions assessed for school districts and fire and police protection.
Sales and Use Exemption for Bond Financing
(§27-65-111 and §57-61-14)
Any eligible purchases made with industrial revenue bonds issued by the Mississippi Business Finance Corporation (MBFC) can be exempted from the sales/use tax in Mississippi.
Bond proceeds may be used to purchase machinery, equipment, and component building materials exempt from sales and use tax. This exemption applies to retail rate taxes, but does not cover tagged vehicles, ongoing expenses, or supply items.
Component building materials purchased directly by the eligible company using industrial revenue bonds issued by MBFC are not subject to the contractor's tax and can be exempted from sales/use tax. To qualify for this exemption, the component building materials must be excluded from the contract and must meet the criteria of being sold to, billed to, and paid for directly by the company and not the contractor. The labor portion of the contract remains subject to the 3.5% contractor's tax.
Sales And Use Tax Exemption For Construction or Expansion
(§27-65-101 and §57-73-21)
A partial or full exemption of sales/use taxes is available to businesses that wish to construct or expand certain types of businesses in Mississippi. Businesses that qualify include manufacturing facilities, processing facilities, technology intensive enterprises, and data or information processing enterprises.
The sales and use tax exemption for construction and expansion is allowed on eligible machinery and equipment purchases related to a new or expanded facility. These purchases are subject to a one-half or full exemption, depending upon construction location. This exemption is available from the beginning of construction or expansion up until three months after initial start-up. This exemption applies to manufacturing and retail rate taxes, but does not cover tagged vehicles, ongoing expenses, or supply items.
Counties in Mississippi are each placed into one of three Tiers based on their level of economic development (see rankings on the last page of this document.) Based on these tiers, the exemption amount allowed is listed below:
County Classification |
Exemption Amount |
| Tier III (less developed) |
100% |
| Tier II (moderately developed) |
50% |
| Tier I (more developed) |
50% |
Component building materials purchased directly by the eligible company are not subject to the contractor's tax and can be exempted from sales/use tax in Tier III counties. To qualify for this exemption, the component building materials must be excluded from the contract and must meet the criteria of being sold to, billed to, and paid for directly by the company and not the contractor. The labor portion of the contract remains subject to the 3.5% contractor's tax. For Tier I and II counties, there is no tax incentive available related to component building materials.
Additionally, a reduced retail rate of 1.5% on the sales of machinery and parts to be used exclusively and directly for industrial purposes is available to businesses that provide technology intensive jobs within Mississippi. To receive this special rate, companies must employ at least 10 new full-time scientists, engineers, and/or computer specialists that have an average wage equaling at least 150% of the state average. Industries eligible for the industrial rate are: Manufacturers of plastics, chemicals, automobiles, aircraft, computers, or electronics, Research and development facilities, Computer design or related facilities, Software publishing facilities, and other technology intensive enterprises as determined by the Mississippi Development Authority.
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