Energy Incentives

Working towards cleaner, more sustainable energy requires the financial resources to turn commitment into reality. Mississippi offers a number of loan programs to support energy-efficiency upgrades and the use of alternative fuels in the state, as well as a loan program to help communities meet the energy infrastructure needs of new and expanding industry. In addition, Mississippi offers a sales and use tax exemption on energy used in the manufacturing process, a reduced sales tax rate on electricity and fuels used in enhanced oil recovery operations, and a reduced severance tax rate for horizontally drilled wells.

Programs

Energy Efficiency Revolving Loan Program

The Energy Efficiency Revolving Loan Program provides loans to businesses and other eligible entities that are increasing energy efficiency in their buildings, equipment and processes.

Alternative Fuel School Bus and Municipal Motor Vehicle Loan

The Mississippi Alternative Fuel School Bus and Municipal Motor Vehicle Revolving Loan Program provides public school districts and municipalities with loans to cover 100 percent of the incremental cost of purchasing alternative fuel vehicles (AFVs) and related systems or of converting existing vehicles to accept alternative fuels, whether propane gas, compressed natural gas or liquefied natural gas.

Energy Performance Contracting

Energy Performance Contracting is an innovative financing package that uses savings from reduced energy consumption to repay the cost of installing energy conservation measures. A qualified Energy Service Company, or ESCO, guarantees a level of energy savings for a specified contract term sufficient to cover all project costs.

To learn more about these energy programs, contact MDA’s Energy Division at 601.359.3449.

Incentives

Energy Infrastructure Revolving Loan

The Energy Infrastructure Revolving Loan Program provides loans to local units of government to help finance the construction or expansion of energy infrastructure critical to economic development.

Sales Tax Exemption on Energy used in Manufacturing

While Mississippi boasts energy costs around 20 percent below the national average, the state now exempts energy used in manufacturing from sales tax, further cutting the costs of one of the key drivers companies consider when choosing a location for new investment.

Reduced Sales Tax Rate on Electricity used in Enhanced Oil Recovery

Companies producing oil and gas in the state using carbon dioxide as a method of enhanced oil recovery (EOR) receive a reduced sales tax rate on electricity and fuel used in production. Previous Mississippi EOR policy was considered by many to be the best in the nation, and the 2013 legislation that reduced the sales tax rate for energy used in these operations to 1.5 percent further improved the state’s competitiveness.

Rebate on Research and Development Costs

The Strengthening Mississippi Academic Research Through (SMART) Business Act Program defrays the research and development costs of companies that operate in Mississippi and partner with a state institution of higher learning. Under this program, a corporation that collaborates with a state university for research and development purposes, including energy-related research, is eligible for a 25-percent rebate of the total research costs. This program is administered by the Mississippi Institutions of Higher Learning (IHL). To learn more, contact IHL at 601.432.6264 or by emailing smartbusact@mississippi.edu.

Reduced Severance Tax Rate for Horizontally Drilled Wells

In 2013, the Mississippi Legislature reduced the severance tax rate to 1.3 percent for oil and gas extracted from horizontally drilled wells The reduced severance tax rate is available for a period of 30 months or until payout of the well and applies to all qualified horizontally drilled wells between July 1, 2013, and June 30, 2018.

For more information about these incentives or to learn more about incentives available to businesses in Mississippi, contact MDA’s Financial Resources Division at 601.359.3552.