1998 Regular Session
To: Ways and Means
By: Representatives Williams, Reynolds
House Bill 1701
AN ACT TO CREATE AN INCOME TAX CREDIT FOR EACH NET NEW FULL-TIME JOB FOR CERTAIN BUSINESSES IN AREAS THAT ARE DESIGNATED BY THE FEDERAL GOVERNMENT AS EMPOWERMENT ZONES OR ENTERPRISE COMMUNITIES; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. (1) As used in this section, "empowerment zones" or "enterprise communities" shall include those areas in Mississippi designated as such pursuant to 26 USCS 1391, as amended.
(2) Permanent business enterprises in areas designated as empowerment zones or enterprise communities shall be allowed a tax credit against taxes imposed by Section 27-7-5, Mississippi Code of 1972, as provided in this section. Subject to the provisions of this section, the credit shall be an amount equal to Two Thousand Five Hundred Dollars ($2,500.00) annually for each net new full-time employee job for five (5) years beginning with years two (2) through six (6) after the creation of the job. The number of new full-time jobs must be determined by comparing the monthly average number of full-time employees subject to the Mississippi income tax withholding for the taxable year in which the job or jobs were created with the corresponding period of the prior taxable year. Subject to the provisions of this section, only those permanent businesses that increase employment by ten (10) or more jobs in empowerment zones or enterprise communities are eligible for the credit. Credit is not allowed during any of the five (5) years if the net employment increase falls below ten (10). In order for a business enterprise to qualify for the credit provided in this section, the business enterprise's principal place of business in this state must be located within the empowerment zone or enterprise community, the jobs for which the business enterprise seeks credit must be filled by employees who live within the empowerment zone or enterprise community and such jobs must be created by the business enterprise's operations within the empowerment zone or enterprise community. The State Tax Commission shall adjust the credit allowed each year for the net new employment fluctuations above the minimum level of ten (10).
(3) Tax credits for five (5) years against the taxes imposed by Section 27-7-5 shall be awarded for additional net new full-time jobs created by business enterprises qualified under this section. The State Tax Commission shall adjust the credit allowed in the event of employment fluctuations during the additional five (5) years of credit.
(4) The sale, merger, acquisition, reorganization, bankruptcy or relocation from one county to another county within the state of any business enterprise may not create new eligibility in any succeeding business entity, but any unused tax credit may be transferred and continued by any transferee of the business enterprise. The State Tax Commission shall determine whether or not qualifying net increases or decreases have occurred or proper transfers of credit have been made, and may require reports, promulgate regulations and hold hearings as needed for substantiation and qualification.
(5) Any tax credit claimed under this section but not used in any taxable year may be carried forward for five (5) years from the close of the tax year in which the qualified jobs were established, but the maximum credit allowed in any one (1) taxable year shall be limited to an amount not greater than fifty percent (50%) of the taxpayer's state income tax liability which is attributable to income derived from operations in the state of that year.
(6) The tax credit provided in this section shall not be used by any business enterprise or corporation other than the business enterprise actually qualifying for the credit.
(7) The tax credit provided for in this section shall be in addition to any tax credits provided for in Section 57-73-21.
(8) This section shall stand repealed from and after January 1, 2007.
SECTION 2. This act shall take effect and be in force from and after its passage.