2005 Regular Session
To: Ways and Means
By: Representative Watson
AN ACT TO PROVIDE AN INCOME TAX JOB CREDIT FOR CERTAIN BUSINESS ENTERPRISES IN AREAS WITHIN MUNICIPALITIES CERTIFIED AS ECONOMICALLY DISTRESSED COMMUNITIES; TO PROVIDE FOR THE DESIGNATION OF SUCH COMMUNITIES AND THE AMOUNT OF SUCH CREDIT; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. (1) As used in this section:
(a) "Business enterprises" means entities primarily engaged in:
(i) Manufacturing, processing, warehousing, distribution, wholesaling and research and development, or
(ii) Permanent business enterprises designated by rule and regulation of the Mississippi Development Authority as air transportation and maintenance facilities, final destination or resort hotels having a minimum of one hundred fifty (150) guest rooms, recreational facilities that impact tourism, movie industry studios, telecommunications enterprises, data or information processing enterprises or computer software development enterprises or any technology intensive facility or enterprise.
(b) "Economically distressed community" means an area within a municipality that contains groupings of census tracts that include and are contiguous to the central business district, where within such census tract groupings at least thirty percent (30%) of the residents have incomes that are less than the national poverty level as published by the United States Bureau of the Census in the most recent decennial census for which data is available; in which the unemployment rate is at least one and one-half (1-1/2) times greater than the national average, as determined by the most recent data from the United States Bureau of Labor Statistics, including estimates of unemployment developed using the calculation method of the United States Bureau of Labor Statistics Census Share; and
(i) The municipal population of which is at least four thousand (4,000) if any portion of the municipality is located within a metropolitan area with a population of fifty thousand (50,000), or more; or
(ii) The municipal population of which is at least one thousand (1,000) if no portion of the municipality is located within a metropolitan area with a population of fifty thousand (50,000), or more.
(c) "Telecommunications enterprises" means entities engaged in the creation, display, management, storage, processing, transmission or distribution for compensation of images, text, voice, video or data by wire or by wireless means, or entities engaged in the construction, design, development, manufacture, maintenance or distribution for compensation of devices, products, software or structures used in the above activities. Companies organized to do business as commercial broadcast radio stations, television stations or news organizations primarily serving in-state markets shall not be included within the definition of the term "telecommunications enterprises."
(2) The governing authorities of a municipality may designate an area within such municipality as an economically distressed community.
(3) Upon designation of an area within a municipality as an economically distressed community, the governing authorities of a municipality shall apply to the State Tax Commission for certification of the area as an economically distressed community. Such application shall provide the information necessary to establish certification as an economically distressed community. The State Tax Commission shall certify an area within a municipality as an economically distressed community if it finds that the designation meets the criteria provided for in subsection (1)(b) of this section.
(4) Permanent business enterprises in areas within municipalities certified by the State Tax Commission as economically distressed communities are allowed a job tax credit for taxes imposed by Section 27-7-5 equal to ten percent (10%) of the payroll of the enterprise for net new full-time employee jobs for five (5) years beginning with years two (2) through six (6) after the creation of the minimum number of jobs required by this subsection. 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 with the corresponding period of the prior taxable year. Only those permanent business enterprises that increase employment by ten (10) or more in an economically distressed community 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). The State Tax Commission shall adjust the credit allowed each year for the net new employment fluctuations above the minimum level of ten (10).
(5) Tax credits for five (5) years for 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 payroll fluctuations during the additional five (5) years of credit.
(6) The sale, merger, acquisition, reorganization, bankruptcy or relocation from one (1) county to another county within the state of any business enterprise may not create new eligibility in any succeeding business entity, but any unused job 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.
(7) 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 credit established by this section taken in any one (1) tax year must 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 for that year.
(8) No business enterprise for the transportation, handling, storage, processing or disposal of hazardous waste is eligible to receive the tax credits provided in this section.
(9) The credits allowed under this section shall not be used by any business enterprise or corporation other than the business enterprise actually qualifying for the credits.
(10) A business enterprise that receives a tax credit under this section shall not be eligible for the tax credit authorized in Section 57-73-21(2), (3) and (4).
SECTION 2. This act shall take effect and be in force from and after January 1, 2005.