Tax Incentives

Mississippi offers businesses locating or expanding in the state a number of tax incentives, including state income tax credits and sales, use and property tax exemptions.

Mississippi Tax Summary

To learn more about corporate taxes in Mississippi, download a PDF summarizing Mississippi’s tax structure here.

Income Tax Incentives

In Mississippi, corporate income is subject to a state income tax of 5 percent. The state offers a number of income tax incentives for companies creating jobs and making corporate investments.

Jobs Tax Credit

In Mississippi, companies receive a corporate income tax credit for creating jobs. These credits are equal to a percentage of payroll for each newly created job. Companies can either use the Jobs Tax Credit, which ranges from 2.5 percent to 10 percent of payroll for each newly created job, or they can opt to monetize that credit in the form of a Job Training Grant to directly reduce their workforce training costs.

Rural Economic Development Income Tax Credit

Rural Economic Development (RED) Income Tax Credits are credits that can be used to reduce Mississippi corporate income tax liability. These credits are available to companies using industrial revenue bonds issued by the Mississippi Business Finance Corporation (MBFC) and are based on the amount of bond-related debt service paid on MBFC-issued industrial revenue bonds.

Manufacturing Investment Tax Credit

Existing manufacturers that further invest in their Mississippi operations may be eligible for an investment tax credit that can be applied to their state income tax liability. To qualify, a manufacturer must have operated in the state for at least two years and must invest an additional $1,000,000 or more in buildings and/or equipment used in the manufacturing operation.

Income Tax Exemption for Businesses in Growth and Prosperity (GAP) Areas

The Growth and Prosperity (GAP) Program designates specific counties as GAP counties and provides income, franchise, sales and property tax incentives to companies that locate or expand in these areas of Mississippi. The program is designed to encourage development in economically challenged areas of the state.

Income Tax Exemption for Aerospace Businesses

Aerospace businesses that locate or expand in Mississippi and create at least 100 full-time jobs and make an investment of at least $30 million in the state may receive an income tax exemption and other tax incentives through the Mississippi Aerospace Initiative Incentives Program.

Income Tax Exemption for Clean Energy Businesses

Mississippi’s Clean Energy Initiative Incentives Program provides an income tax exemption and other tax incentives to companies that manufacture systems or components used to generate clean, renewable, or alternative energy and create at least 250 full-time jobs and invest a minimum of $50 million in Mississippi.

National or Regional Headquarters Tax Credits

Mississippi awards income tax credits to companies locating or transferring their headquarters operations to the state and basing their executive officers and other high-level employees based in Mississippi. Credits include an income tax credit for each new full-time employee and an income tax credit equal to the actual relocations costs paid by the company.

View a full list of income tax incentives available to businesses in Mississippi here.

Sales & Use Tax Exemptions

All tangible personal property sold in Mississippi is considered taxable unless specifically specified by state law, and companies doing business in Mississippi that bring tangible personal property into the state are required to pay use tax on that property.

The regular retail sales and use tax rate on goods and services sold in Mississippi is 7 percent. Manufacturing machinery is taxed at 1.5 percent, and electricity and fuel used in the manufacturing process are exempt from sales tax. A contractor’s tax of 3.5 percent of a contractor’s gross receipts from construction is assessed on the construction of commercial real property in Mississippi. While contractor’s tax has no exemptions, the contractor is allowed to purchase all component building materials exempt from sales tax. The state offers a number of sales and use tax exemptions for businesses.

Sales and Use Tax Exemption for Construction or Expansion

Mississippi offers eligible businesses that construct a new facility or expand an existing facility in the state a sales and use tax exemption on component building materials, machinery and equipment. Eligible businesses include manufacturers and custom processors, along with data and information processing companies and technology-intensive facilities that are certified by the Mississippi Development Authority.

Sales and Use Tax Exemption for Bond Financing

Eligible businesses utilizing industrial revenue bonds issued by the Mississippi Business Finance Corporation (MBFC) may be eligible for a sales and use tax exemption on component building materials, machinery and equipment purchased using bond proceeds.

Sales and Use Tax Exemption for Businesses in Growth and Prosperity (GAP) Areas

The Growth and Prosperity (GAP) Program designates specific counties as GAP counties and provides sales and use, income, franchise and property tax incentives to companies that locate or expand in these areas of Mississippi. The program is designed to encourage development in economically challenged areas of the state.

Sales and Use Tax Exemption for Headquarters

A sales and use tax exemption is available for eligible businesses that create their national or regional headquarters in Mississippi, transfer their headquarters to the state or grow their existing headquarters operations in the state. This exemption applies to component building materials used in the construction or improvement of a facility, as well as the machinery and equipment used in the facility. A minimum of 20 new headquarters jobs must be created for a business to qualify for this exemption.

Sales and Use Tax Exemption for Aerospace Businesses

Aerospace businesses that locate or expand in Mississippi and create at least 100 full-time jobs and make an investment of at least $30 million in the state may receive a sales and use tax exemption and other tax incentives through the Mississippi Aerospace Initiative Incentives Program.

Sales and Use Tax Exemption for Clean Energy Businesses

Mississippi’s Clean Energy Initiative Incentives Program provides a sales and use tax exemption and other tax incentives to companies that manufacture systems or components used to generate clean, renewable or alternative energy and create at least 250 full-time jobs and invest a minimum of $50 million in Mississippi.

Sales and Use Tax Exemption for Data Center Enterprises

Mississippi provides data centers with a sales and use tax exemption for all new and replacement computing equipment and software. Data centers must invest at least $50 million and must create at least 50 new jobs paying 150 percent of the average state wage to qualify for this program.

Franchise Tax Incentives

Currently, most corporations engaged in business in Mississippi are subject to franchise tax, a tax assessed on a company’s capital value.   The current franchise tax rate is $2.50 per $1,000 of capital invested in Mississippi.  Mississippi’s franchise tax will be phased out over a 10-year period, reducing by $0.25 per $1,000 of capital invested each year from 2019 to 2027.  By 2028, the franchise tax rate will be fully phased out, and from 2028 onward, businesses will pay only $25.00 in franchise tax each year, instead.

Franchise Tax Exemption for Businesses in Growth and Prosperity (GAP) Areas

The Growth and Prosperity (GAP) Program designates specific counties as GAP counties and provides income, franchise, sales and use and property tax incentives to companies that locate or expand in these areas of Mississippi. The program is designed to encourage development in economically challenged areas of the state.

Franchise Tax Exemption for Aerospace Businesses

Aerospace businesses that locate or expand in Mississippi, create at least 100 full-time jobs and make an investment of at least $30 million in the state may receive a franchise tax exemption and other tax incentives through the Mississippi Aerospace Initiative Incentives Program.

Franchise Tax Exemption for Clean Energy Businesses

Mississippi’s Clean Energy Initiative Incentives Program provides a franchise tax exemption and other tax incentives to companies that manufacture systems or components used to generate clean, renewable or alternative energy and create at least 250 full-time jobs and invest a minimum of $50 million in Mississippi.

Property Tax Incentives

Counties and municipalities levy a property tax on real and tangible personal property in Mississippi. Property is assessed at 15 percent of true value, and this assessed value is then multiplied by the millage rate to determine a business’s annual tax liability. Each city and/or county sets its millage rate. A number of property tax exemptions are available to businesses locating or expanding in Mississippi.

Standard Property Tax Exemptions

Local governing authorities in Mississippi may grant eligible businesses a property tax exemption on real and tangible personal property being used in the state for up to 10 years. The exemption may be granted for all local property taxes except school district taxes on any property, with the exception of finished goods or rolling stock.

Fee in Lieu of Property Tax

Eligible businesses making certain investments in the state may be eligible to pay a fee in lieu of property taxes for a period of up to twenty years.  Fee in lieu agreements are negotiated between the eligible company and local governmental authorities.

Ad Valorem Exemption for Businesses in Growth and Prosperity (GAP) Areas

The Growth and Prosperity (GAP) Program designates specific counties as GAP counties and provides property, income, franchise, and sales and use tax incentives to companies that locate or expand in these areas of Mississippi. The program is designed to encourage development in economically challenged areas of the state.

Free Port Warehouse Exemption

An exemption from property taxes is available on finished goods inventory that is being held and stored prior to transport to a destination outside Mississippi. The exemption may be granted for all local property taxes for any period of time set by the local governing authority.

Advantage Jobs Rebate

Advantage Jobs Rebate Program

Many businesses creating new jobs in Mississippi are eligible to receive a cash rebate equal to a percentage of their Mississippi payroll through the Advantage Jobs program. This rebate is available for up to 10 years. The average wage of all new jobs created must meet the program’s minimum average wage requirements.

To view a list of average annual salaries in Mississippi, click here.

Other Tax Incentives

Sales and Use Tax Rebate for Tourism Projects

The Mississippi Tourism Rebate Program provides a tax rebate to qualified applicants of new tourism-oriented projects in Mississippi. The program allows a portion of the sales tax paid by visitors to the eligible tourism-oriented enterprise to be paid to the applicant as reimbursement for eligible costs incurred during the construction of the project.

Motion Picture Production Rebate Program

The Mississippi Motion Picture Production Incentive is a cash rebate program designed to encourage motion picture production in Mississippi. The program is designed to return a portion of the qualified expenses incurred in the state back to the production company.

For more information on tax incentives available from the Mississippi Department of Revenue, download the Mississippi Tax Incentives, Exemptions and Credits booklet.

Each year, the Mississippi Department of Revenue ranks Mississippi’s counties on their level of development, and these rankings determine the availability of certain tax incentives. To view the current county rankings list, click here.