MISSISSIPPI LEGISLATURE
2026 Regular Session
To: Ways and Means
By: Representative Porter
AN ACT TO CREATE THE "MISSISSIPPI HUMAN CAPITAL SUPPLEMENTAL TAX ACT"; TO ESTABLISH AND LEVY A SUPPLEMENTAL TAX ON ARTIFICIAL INTELLIGENCE DISPLACEMENT OF HUMAN WORKERS; TO PROVIDE FOR THE RATE OF THE TAX; TO CREATE THE "MISSISSIPPI WORKFORCE TRANSITION AND DEVELOPMENT FUND" AS A SPECIAL FUND IN THE STATE TREASURY; TO PROVIDE THE PURPOSES FOR WHICH MONIES IN THE FUND MAY BE USED; TO CREATE THE AI WORKFORCE IMPACT ADVISORY COUNCIL AND TO PROVIDE FOR THE COMPOSITION OF THE COUNCIL; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. This act shall be known and may be cited as the "Mississippi Human Capital Supplemental Tax Act".
SECTION 2. The Legislature finds that:
(a) Artificial intelligence and automation technologies are rapidly transforming Mississippi's economy and labor market;
(b) While technological advancement benefits the state's competitiveness, the displacement of human workers creates social and economic costs that warrant public investment in workforce transition;
(c) Industries that realize productivity gains and cost savings through AI-driven workforce displacement should contribute to the re-skilling and retraining of affected workers;
(d) A sustainable workforce development system requires dedicated funding to ensure Mississippi workers can adapt to changing economic conditions.
SECTION 3. (1) As used in this section, the following words and phrases shall have the meanings ascribed in this subsection unless the context clearly requires otherwise:
(a) "Artificial Intelligence (AI)" means any system or technology that performs tasks typically requiring human intelligence, including, but not limited to, machine learning, natural language processing, computer vision, robotics, and automated decision-making systems.
(b) "AI displacement" means the measurable reduction in human employment directly attributable to the implementation of AI systems or technologies.
(c) "Baseline employment level" means the number of full-time equivalent employees in a specific job category during the tax year immediately preceding the implementation of AI systems.
(d) "Covered employer" means any person, corporation, partnership, or business entity operating in Mississippi that:
(i) Employs fifty (50) or more persons; and
(ii) Implements AI systems that result in AI displacement.
(e) "Department" means the Mississippi Department of Revenue.
(f) "Displaced position" means a full-time equivalent position eliminated or left unfilled due to AI implementation, calculated on an annual basis.
(g) "Full-Time Equivalent (FTE)" means a standard of two thousand eighty (2,080) hours of work annually.
(2) (a) There is hereby levied upon every covered employer a Human Capital Supplemental Tax based on the number of displaced positions resulting from AI implementation. The tax shall be assessed as follows:
(i) For the first ten (10) displaced positions: Five Thousand Dollars ($5,000.00) per position per year;
(ii) For displaced positions eleven (11) through fifty (50): Seven Thousand Five Hundred Dollars ($7,500.00) per position per year; and
(iii) For displaced positions fifty-one (51) and above: Ten Thousand Dollars ($10,000.00) per position per year.
(b) The tax levied under this section shall be assessed annually based on the cumulative AI Displacement measured from the baseline employment level.
(c) The tax rates specified in paragraph (a) of this subsection shall be phased in as follows:
(i) Tax year one (1): fifty percent (50%) of the specified rates;
(ii) Tax year two (2): seventy-five percent (75%) of the specified rates; and
(iii) Tax year three (3) and thereafter: one hundred percent (100%) of the specified rates.
(d) A covered employer may claim a credit against the tax liability under this section equal to:
(i) One hundred percent (100%) of documented costs for retraining displaced workers for positions within the same company, up to Seven Thousand Five Hundred Dollars ($7,500.00) per worker;
(ii) Seventy-five percent (75%) of documented costs for funding approved external workforce development programs for displaced workers, up to Five Thousand Dollars ($5,000.00) per worker.
(e) A covered employer that creates new positions in Mississippi requiring skills distinct from displaced positions may claim a credit of Three Thousand Dollars ($3,000.00) per new FTE, up to fifty percent (50%) of the total tax liability under this section.
(f) The department may grant temporary exemptions or payment plans for employers demonstrating significant financial hardship.
(g) Positions eliminated through documented natural attrition (retirement, voluntary resignation) and not refilled due to AI implementation shall be assessed at fifty percent (50%) of the applicable tax rate for the first two (2) years.
(3) (a) Each covered employer shall file an annual Human Capital Impact Statement with the department by April 15 following the close of the tax year, including:
(i) Baseline employment level by job category;
(ii) Current employment level by job category;
(iii) Description of AI systems implemented;
(iv) Number of displaced positions;
(v) Calculation of tax liability; and
(vi) Documentation of any claimed credits or exemptions.
(b) Covered employers shall maintain records supporting their filings for a period of five (5) years.
(c) The Human Capital Impact Statement shall be certified by a chief executive officer or chief financial officer under penalty of perjury.
(4) (a) There is hereby created in the State Treasury a special fund to be known as the "Mississippi Workforce Transition and Development Fund". The fund shall consist of all revenues collected under this act; any federal grants or private donations designated for workforce development; and interest earnings on monies in the fund. Monies in the fund shall be appropriated by the Legislature exclusively for:
(i) Skills training and re-skilling programs for workers displaced by AI;
(ii) Apprenticeship and on-the-job training initiatives;
(iii) Educational partnerships with community colleges and technical schools;
(iv) Career counseling and job placement services;
(v) Support services including transportation and childcare assistance during training;
(vi) Grants to regional workforce development organizations; and
(vii) Administration of workforce development programs (not to exceed five percent (5%) of annual fund revenues).
The Mississippi Department of Employment Security, in consultation with the Mississippi Community College Board, shall administer the fund and develop program guidelines.
(5) The department shall have authority to audit covered employers to ensure compliance with this section.
(6) (a) There is hereby created the AI Workforce Impact Advisory Council. The council shall consist of:
(i) The Executive Director of the Mississippi Department of Employment Security (Chair);
(ii) The Executive Director of the Mississippi Development Authority;
(iii) The Executive Director of the Mississippi Community College Board;
(iv) Three (3) representatives from industries utilizing AI, appointed by the Governor;
(v) Three (3) representatives from labor or workforce advocacy organizations, appointed by the Governor; and
(vi) Two (2) workforce development experts, appointed by the Governor.
(b) The council shall:
(i) Review the implementation and effectiveness of this section annually;
(ii) Recommend adjustments to tax rates and structure;
(iii) Identify emerging workforce development needs;
(iv) Coordinate with stakeholders on transition strategies; and
(v) Submit an annual report to the Legislature by January 15.
(7) The department is authorized to promulgate rules and regulations necessary to implement and enforce this section, including, but not limited to:
(a) Procedures for calculating displaced positions;
(b) Documentation requirements for baseline employment;
(c) Standards for qualifying AI systems;
(d) Processes for claiming credits and exemptions; and
(e) Audit procedures and protocols.
SECTION 4. This act shall take effect and be in force from and after January 1, 2027.