Economic Development
Taxes & Incentives
Special state-offered finance programs and incentives such as tax breaks, workforce training and support, and strong cooperation between the public and private sectors make Webster County an ideal location for progressive business and industry.
Local programs tailored to meet the needs of a particular company, along with a competitive wage rate, further encourage businesses to make Webster County their home. In addition, an investment in Webster County offers incentives not available to many other communities through our designation a tier III county, and inclusion as part of the Gulf Opportunity Zone (GO Zone).
Additional Information
Following is a synopsis of taxes applicable to new business, and tax credits, abatements, and incentives available to qualifying businesses. For additional information on these topics, along with specific requirements related to applying for the incentives, visit the Mississippi State Tax Commission’s web site and select Tax Incentives from the Reference column, or the Mississippi Development Authority web site.
Tax Credits and Abatements
Doing business in other states can be very taxing, but Mississippi’s excellent business climate means its taxes are lower than other states’ levels. The ad valorem millage rate in Webster County is the seventh lowest in the state of Mississippi. Special incentives are available through the Gulf Opportunity Zone, Momentum Mississippi, and Advantage Jobs Incentive Programs.
Additionally, counties in Mississippi are each placed into one of three Tiers based on the county’s level of economic development. Webster County is classified as a Tier III county by the state of Mississippi which provides the maximum level of advantages to industries investing in Webster County.
The following is a summary of how Mississippi’s tax advantages can work to your advantage in Webster County.
No sales tax on purchases of raw materials, processing chemicals, or packaging materials |
No sales tax on direct purchases of construction materials, machinery, and equipment for qualified businesses that are financed through Industrial Revenue Bonds or Small Enterprise Development Bonds or for qualified businesses locating or expanding in Tier Three Counties (Webster County is a Tier Three County) |
A 1½% sales tax on machinery and parts used directly in manufacturing and on industrial electricity, natural gas, and fuels |
Favorable individual and corporate income tax rates |
Five-year state income tax credits of $1,000 for each new R&D job created by a new or expanding business |
For companies transferring regional or national headquarters to Mississippi, five-year state income tax credits of $500 to $2,000 (depending upon qualified employee’s wages) for each new job created and full sales tax exemptions for direct purchases of construction materials, machinery, and equipment for the headquarters facility |
State income tax credits equal to 50% of child care expenses |
State income tax credits equal to 50% of basic skills training and job retraining expenses |
State income tax credits for qualified industries in conjunction with certain bond financing through the Mississippi Business Finance Corporation |
| Exemptions from county property taxes, except school taxes |
| Exemptions of property taxes on finished goods through a Free Port Warehouse Law |
All businesses in Mississippi are subject to state taxes. These taxes fall into four basic tax types:
Four Basic Tax Types
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1. Corporate Income Tax
In Mississippi, corporate income is subject to a state income tax. Unless a company is taxable in another state, this tax is based on the company’s net taxable income. Income tax for multi-state corporations is calculated by determining a Mississippi to total company ratio that is applied to the net business income for the corporation. For retailers, wholesalers, service providers, and many other business operations, income is apportioned based on a ratio of sales in Mississippi versus sales for the total entity.
Mississippi Income Tax Rates
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| First $5,000 of taxable income | 3% |
| Next $5,000 of taxable income | 4% |
| Remaining taxable income | 5% |
Mississippi allows a net operating loss to be carried back two years and forward for twenty years following the taxable year of such loss. There are no county or municipal income tax levies in Mississippi, and the state does not allow deductions of federal income taxes.
Corporate Income Tax Incentives Available
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| Job Tax Credit | Available to certain types of businesses that create and sustain new jobs in Mississippi. A credit of 10% of payroll may be taken against Mississippi corporate income tax by eligible businesses that create 10 or more jobs. |
| Rural Economic Development Tax Credit |
May be used to offset up to 80% of the state corporate income tax
liability attributable to the project each year for the life of the industrial revenue bonds used to finance the project. |
| Existing Manufacturer Tax Credit | For existing manufacturers that have operated in Mississippi for at least two years if an investment of at least $1,000,000 is made in additional buildings and/or equipment. The company is eligible for an income tax credit of 5% of the approved investment. |
| Research and Development Jobs Credit |
State income tax credits of $1,000 per full-time new job requiring research and development skills, created and sustained by a new or expanding business. |
| National or Regional Headquarters Jobs Credit |
For companies establishing or transferring regional or national headquarters to Mississippi, five-year state income tax credits of $500 to $2,000 (depending upon qualified employee’s wages) for each new job created provided that they create and maintain a minimum of 35 headquarters jobs. |
| Skills Training Tax Credit |
State income tax credits equal to 50% of basic skills training and job retraining expenses that can be carried forward up to five years from the year that costs were incurred. |
| Child/Dependent Care Tax Credit | State income tax credits of 50% of the actual costs of employer-sponsored dependent day care. Unused credits can be carried forward up to five years. |
| Other Income Tax Credits |
There are other more industry specific credits such as the Ad Valorem Tax Credit, Alternative Energy Tax Credit, Export Port Charges Tax Credit, Import Port Charges Tax Credit, Broadband Technology Tax Credit, and the Motion Picture Production Tax Incentive. |
2. Corporate Franchise Tax
Most corporations doing business in Mississippi are subject to this tax which is assessed on the company’s capital value. The rate is $2.50 per $1,000 of the value of the capital used, invested, or employed in the State. However, the tax base cannot be less than the corporation’s assessed value of real and tangible personal property in Mississippi. For multi-state corporations, capital is apportioned to Mississippi on a formula/ratio basis.
Corporate Franchise Tax Incentives Available
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| Other Franchise Tax Credits |
There are more industry specific franchise tax credits such as the In-Lieu Fee for Major Economic Projects, and the Broadband Technology Tax. |
3. Sales and Use Tax
All tangible personal property sold within the state is considered taxable unless specifically exempted or assigned a reduced rate by state law. Companies doing business in Mississippi that bring tangible personal property into Mississippi are required to pay use tax on that property. Some services are also subject to sales tax. Although sales taxes vary based upon the types of transactions, some of the more specific sales taxes applicable to manufacturers are:
Sales by a Manufacturer
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| Sales of tangible personal property to the final consumer | 7% |
| Sales to a manufacturer that has a direct pay permit | 0% |
| Sales to a wholesaler, out-of-state party, or a retailer with a resale permit for items purchased for resale | 0% |
| Sales to exempt customers with an Exemption Letter | 0% |
| Commercial Construction | 3.5% |
Sales to a Manufacturer
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| Raw materials | 0% |
| Catalysts, chemicals, and gases used directly in the process | 0% |
| Packaging, containers, and pallets that are sold with the finished goods | 0% |
| Pollution control equipment, if qualified | 0% |
| Machinery and parts used in the manufacturing process | 1.5% |
| Industrial electricity, gas, and fuels | 1.5% |
| Fuel used in the production of electric power for sale | 0% |
| Industrial water | 7% |
| Telephone services | 7% |
| Equipment, furniture, supplies, rentals, and machinery not used directly in the manufacturing process | 7% |
Sales and Use Tax Incentives Available
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| Sales and Use Tax Exemption for Construction or Small Enterprise or Expansion |
No sales tax on direct purchases of construction materials, machinery, and equipment for qualified businesses that are financed through Industrial Revenue Bonds or Small Enterprise Development Bonds or for qualified business locating or expanding in Webster County by virtue of its designation as a Tier Three County. 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. |
| Sales and Use Exception for Bond Financing |
Any eligible purchases made with industrial revenue bonds issued by the Mississippi Business Finance Corporation can be exempted from the sales/use tax. |
| Other Franchise Tax Credits |
There are more industry specific franchise tax credits such as the In-Lieu Fee for Major Economic Projects, and the Broadband Technology Tax. |
| National or Regional Headquarters Incentive |
Out-of-state businesses that establish or transfer a national or regional headquarters to Mississippi are eligible for sales and use tax credits, provided that a minimum of 35 headquarters Incentive jobs are created and maintained for five years. |
| Other Sales and Use Tax Incentives |
More industry specific such as Broadband Technology Exemption, and the Motion Picture Production Exemption. |
4. Property Tax
Counties and municipalities levy a property tax (Ad Valorem) on real and tangible personal property in Mississippi. This assessment is at 15% of true value (less with homestead exemption). The assessed value is then multiplied by the millage rate to determine the annual tax liability.
Property Tax Incentives Available
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| 10-Year Property Tax Exemptions |
A 10-year exemption from property taxes on land, building, equipment, and certain inventory made at the discretion of the related municipal authorities and/or the local board of supervisors. Does not include school taxes, finished goods, and rolling stock. |
| Property Tax Fee-in-Lieu |
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. The fee must be at least 1/3 of the property tax levy, including the property tax assessed for school districts, and is valid for 10 years. |
| Industrial Revenue Bond Exemptions | A 10-year exemption from property taxes on land, building, equipment, and certain inventory on property purchased with industrial revenue bond proceeds from bonds issued by the Mississippi Business Finance Corporation. Must be approved by the related municipal authorities and/or the local board of supervisors, and does not include school taxes, finished goods, and rolling stock. |
| Free Port Warehouse Exemption |
Perpetual exemption of all property taxes on finished goods distributed outside of the state granted by local authorities. |
| In-State Inventory Exemption | The related municipal authorities and/or the board of supervisors may grant a finished goods inventory exemption on inventory that will remain in Mississippi. Exemption may be granted for up to 10 years on all property taxes except school taxes, finished goods, and rolling stock. |
| Broadband Technology Ad Valorem Exemption | Available through June 30, 2013, allows for approved businesses to exempt equipment that was purchased for use in the deployment of broadband technology. Applies to all property taxes except school and fire and police protection. |
Other Taxes
Withholding of Personal Income Tax
Mississippi levies a tax on individual income in the state, assessed at the same rate for individuals as it is for business entities. This tax is a deduction from the employee’s wages, and does not require a contribution from the employer.
State Unemployment Compensation Tax
Mississippi levies an unemployment compensation tax on the first $7,000 of an employee’s annual wages. The maximum contribution rate for employers is 5.4%, and the minimum rate varies from year to year depending upon the general experience rate of the State. The minimum rate is 0.9%. New employers in the state are assigned an initial rate of 2.7% of wages until the Mississippi Department of Employment Security can compute an actual experience rate for the employer.
Worker’s Compensation
Mississippi employers with five or more employees are required to purchase worker’s compensation coverage through an insurance carrier, or they must qualify with the Mississippi Worker’s Compensation Commission as a self-insurer. The compensation is about two-thirds of the claimant’s average weekly wages for up to 450 weeks, not including medical payments. These amounts are indexed on an annual basis.
Incentives for New and Expanding Industry
Incentives are a major factor in Mississippi's reputation as one of the best business climates in the United States. Few other states can match the state's incentives, which include the following important components. Mississippi continues to put programs in place that will help your business do good business. Just for starters, consider the following advantages:
Foreign trade zones, safe areas where your company's goods can be landed, stored, processed, and tran-shipped - all without incurring custom duties (import tax). Foreign trade zones can provide customers with manufacturing, assembling, packaging, and display facilities, all free of duties. |
Customized training, developed specifically for your business's needs. Through Holmes Community College, we can find you the right people and train them your way, on your company site, at mobile facilities, or at the HCC campus. It's your choice. |
The right-to-work is assured by Mississippi's Constitution, not just by statute as in most other right-to-work states. So your employees cannot be required to join a union as a condition of their employment. |
Favorable unemployment insurance rates and workers' compensation rates make that bottom line healthier. |
State-sponsored financing programs for land, building, and new equipment. |
Utility companies offer discounts on telephone and electric rates to eligible companies. |
Mississippi's environmental regulations are, in most cases, identical to federal regulations. |
Obtaining environmental permits in Mississippi is made easier by the fact that most permits are issued by the Mississippi Department of Environmental Quality (DEQ) and can be obtained from the office in Jackson. Although not actually defined as one-stop permitting, the process is not complicated. Senior agency management are accessible for thorough, open communication and decision making. The DEQ is the delegated authority to issue almost all federal environmental permits. The Permit Board meets bimonthly. |
Webster County has exceptionally clean air and abundant water resources; these environmental conditions make almost every area of the county ideal for greenfield industrial sites. Mississippi is one of the few states that meets all of the national ambient air quality standards for protection of public health and welfare. There are no non attainment areas in the state. |
Other Incentives
Gulf Opportunity
The Gulf Opportunity Zone Act of 2005 is federal legislation that (GO) Zone (link) was passed by Congress and signed into law by President Bush in December of 2005. This legislation provides for Federal Tax Incentives to areas affected by Hurricanes Katrina, Rita, and Wilma that were designated as warranting individual or public and individual assistance. Webster County is included in the Zone for individual and public assistance.
Momentum
The Momentum Mississippi Incentive legislation has two Mississippi (link) components – first, enhancing tax credits existing tax credits and incentives to include high-tech non-manufacturing industries and provide investment incentives to existing Mississippi businesses and second to fund incentive programs through issuance of bonds.
Mississippi Development Authority (MDA) is currently preparing guidelines based on this legislation. The information provided in this summary may change as MDA and other agencies develop guidelines for the new programs and adjust guidelines for existing programs.
Advantage Jobs
Included in Momentum Mississippi, this program provides for a Incentive Program rebate of a percentage of Mississippi payroll to qualified employers for a period of up to 10 years. Available to businesses that promise significant economic development of the economy through the creation of jobs. The average of all jobs included in the program must meet the minimum average wage requirements:
- Data or Information Processing Enterprises that provide an annual wage of 100% of the lesser of the average county or state wage and 100 new jobs
- Manufacturers of Distributors that provide an annual wage of 110% of the lesser of the average county or state wage and 20 new jobs, with an investment by the business of at least $20,000,000 in property, plant and equipment
- Any business except retailers and gaming establishments that provide an annual wage of 125% of the lesser of the average county or state wage and 10 new jobs
- Research and Development Enterprises that provide an annual wage of 150% of the lesser of the average county or state wage and 10 new jobs
- Technology Intensive Enterprises that provide an annual wage of 150% of the lesser of the average county or state wage and 10 new jobs
In addition to the above requirements, eligible businesses must provide a basic health benefits plan and execute a performance agreement with MDA specifying the manner in which the enterprise will utilize the rebate.
Financial Assistance
The Mississippi Development Authority administers several programs which may provide financial assistance for eligible businesses. Because there are numerous programs each with different eligibility criteria, it is recommended that interested parties contact the Webster County Economic Development Foundation or the MDA to determine the programs that best fit your individual needs. To provide an idea of the nature of assistance available, following is a list of programs available through MDA for qualifying companies:
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Loans |
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The Mississippi Development Authority also provides financial assistance to communities to assist in the expansion or development of industrial projects. For more information contact the Webster County Development Council or visit www.mississippi.org.