Senate Bill 3168

AN ACT TO AMEND SECTION 57-113-21, MISSISSIPPI CODE OF 1972, TO REVISE THE DEFINITIONS OF CERTAIN TERMS FOR PURPOSES OF THE SALES, USE AND FRANCHISE TAX EXEMPTIONS FOR DATA CENTER ENTERPRISES; TO AMEND SECTION 57-113-23, MISSISSIPPI CODE OF 1972, TO REVISE THE REQUIRED CONTENTS OF THE APPLICATION TO BE SUBMITTED BY BUSINESS ENTERPRISES SEEKING THE EXEMPTIONS; TO PROVIDE THAT A BUSINESS ENTERPRISE SHALL AUTOMATICALLY BE ELIGIBLE FOR UP TO TWO TEN-YEAR EXTENSIONS OF THE TAX EXEMPTIONS FOR A QUALIFYING ADDITION OR EXPANSION, INCLUDING HARDWARE REPLACEMENT, TO A DATA CENTER; TO AMEND SECTION 57-113-25, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT A BUSINESS ENTERPRISE HAS 60 DAYS FROM THE DATE OF NOTICE OF NONCOMPLIANCE TO REMEDY THE NONCOMPLIANCE BEFORE FORFEITING ITS TAX-EXEMPT STATUS, SUBJECT TO ANY PENALTIES PROVIDED IN MISSISSIPPI DEVELOPMENT AUTHORITY RULES AND REGULATIONS; TO PROVIDE THAT A BUSINESS ENTERPRISE SEEKING AN EXTENSION OF THE TAX EXEMPTIONS BASED ON A QUALIFYING ADDITION OR EXPANSION TO A DATA CENTER SHALL APPLY DIRECTLY TO THE DEPARTMENT OF REVENUE; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. Section 57-113-21, Mississippi Code of 1972, is amended as follows:

57-113-21. As used in this article:

(a) "Blockchain" means data that is shared across a network to create a ledger of verified transactions or information among network participants linked using cryptography to maintain the integrity of the ledger and to execute other functions and distributed among network participants in an automated fashion to concurrently update network participants on the state of the ledger and any other functions.

( * * *ab) "Business enterprise" means any for-profit business * * * establishment, excluding any enterprise engaged in digital asset mining, registered to do business in the state and which is the owner, operator, tenant or affiliate of a data center in this state with a minimum capital investment of:

(i) For a newly constructed data center, Two Hundred Fifty Million Dollars ($250,000,000.00), which will create at least thirty-five (35) new, full-time jobs with a minimum average annual salary of one hundred twenty-five percent (125%) of the average annual state wage; or

(ii) For an addition or expansion, including hardware replacement, to a data center that met the criteria of subparagraph (i) of this paragraph (b) when newly constructed, One Hundred Million Dollars ($100,000,000.00).

( * * *bc) "Data center" means one or more buildings or an array of interconnected buildings in one (1) physical location or multiple physical locations that are owned, leased, occupied or operated by a business enterprise that utilizes hardware, software, technology, infrastructure and/or workforce, to store, manage * * * ~~or manipulate~~, process or disseminate digital data.

(d) "Digital asset" means virtual currency, cryptocurrencies, natively electronic assets, including stablecoins and nonfungible tokens, and other digital-only assets that confer economic, proprietary, or access rights or powers.

(e) "Digital asset mining" means the use of electricity to power a computer for the purpose of securing a blockchain network.

( * * *cf) "MDA" means the Mississippi Development Authority.

( * * *dg) "State tax" means:

(i) Any sales and use tax imposed on the business enterprise pursuant to law related to the purchase or lease of component building materials and equipment for initial construction of facilities or expansion of facilities that are certified by the Mississippi Development Authority;

(ii) Any sales and use tax imposed by law on the business enterprise pursuant to law related to the purchase of replacement hardware, software or other necessary technology to operate a data center;

* * *

( * * *iviii) Franchise tax imposed pursuant to law on the value of capital used, invested or employed by the business enterprise certified by the Mississippi Development Authority * * *.; and

(iv) Any tax imposed on a data center pursuant to law related to the purchase of electricity.

SECTION 2. Section 57-113-23, Mississippi Code of 1972, is amended as follows:

57-113-23. (1) Business enterprises, as defined in Section 57-113-21(b)(i), wishing to apply for the tax exemptions authorized by this article shall make application to the MDA prior to construction or acquisition of the buildings for the location * * * ~~or expansion~~ of the business enterprise in this state. The application, at a minimum, shall contain:

(a) An overview of the project that includes the selected site, the number of jobs proposed, the length of time necessary for the company to meet its investment and employment requirements;

(b) A two-year business plan * * *;

* * *

( * * *dc) An acknowledgment that the business entity will be required to provide annual documentation to demonstrate that the minimum investment and job * * * ~~requirement is~~ requirements are being maintained; and

( * * *ed) Such information as may be reasonably requested by the MDA to determine eligibility for the exemption.

(2) Business enterprises, as defined in Section 57-113-21(b)(ii), shall automatically be eligible for up to two (2) ten-year extensions of the tax exemptions authorized by this article.

SECTION 3. Section 57-113-25, Mississippi Code of 1972, is amended as follows:

57-113-25. (1) Upon approval of the application, the MDA shall issue a certification designating the business enterprise, as defined in Section 57-113-21(b)(i), as eligible for the tax exemptions authorized by this article. This certification shall document the date by which all commitments must be met.

(2) Upon the issuance of the certification, the business enterprise, as defined in Section 57-113-21(b)(i), shall be exempt from state taxes for a period of ten (10) years, subject to the performance requirements set out in the agreement required by subsection (3)(c) of this section.

(3) The following conditions, along with any other conditions the MDA shall promulgate from time to time by rule or regulation, shall apply to such exemptions:

(a) A business enterprise, as defined in Section 57-113-21(b)(i) or (ii), using any exemption provided under this article * * * ~~is nontransferable and~~ cannot * * * ~~be applied, used or assigned~~ transfer its exemption to any other person or business * * * ~~or tax account~~ without prior approval by the MDA;

(b) No approved business enterprise, as defined in Section 57-113-21(b)(i) or (ii), may claim or use the exemption granted under this article unless that business enterprise is in full compliance with all state and local tax laws, and related ordinances and resolutions. However, if an audit conducted by any federal or state agency in the ordinary course of business reveals any noncompliance by a business enterprise exempt from state taxes under this article, the business enterprise shall have sixty (60) days from the date of notice in which to remedy its noncompliance before forfeiting its tax-exempt status, subject to any penalties provided in MDA rules and regulations; and

(c) The business enterprise, as defined in Section 57-113-21(b)(i), must enter into an agreement with the MDA which sets out, at a minimum, the performance requirements of the approved business enterprise during the term of the exemption and provisions for the recapture of all or a portion of the taxes exempted if the performance requirements of the business enterprise are not met.

(4) Upon certifying a business enterprise, as defined in Section 57-113-21(b)(i), as eligible for the exemptions under this article, the MDA shall forward the certification along with any other necessary information to the Department of Revenue so that the exemptions can be implemented. A business enterprise, as defined in Section 57-113-21(b)(ii), shall apply directly to the Department of Revenue for the extension of the exemptions and shall provide any necessary information to the department. The Department of Revenue shall promulgate rules and regulations, in accordance with the Mississippi Administrative Procedures Law, for the implementation of the state tax exemptions granted under this article.

SECTION 4. This act shall take effect and be in force from and after July 1, 2025, and shall stand repealed on June 30, 2025.