"Mississippi Human Capital Supplemental Tax Act"; create.

H. B. No. 1810 *HR43/R1884* ~ OFFICIAL ~ R3/5
26/HR43/R1884
PAGE 1 (BS\KP)

To: Ways and Means
MISSISSIPPI LEGISLATURE REGULAR SESSION 2026

By: Representative Porter

HOUSE BILL NO. 1810

AN ACT TO CREATE THE "MISSISSIPPI HUMAN CAPITAL SUPPLEMENTAL 1
TAX ACT"; TO ESTABLISH AND LEVY A SUPPLEMENTAL TAX ON ARTIFICIAL 2
INTELLIGENCE DISPLACEMENT OF HUMAN WORKERS; TO PROVIDE FOR THE 3
RATE OF THE TAX; TO CREATE THE "MISSISSIPPI WORKFORCE TRANSITION 4
AND DEVELOPMENT FUND" AS A SPECIAL FUND IN THE STATE TREASURY; TO 5
PROVIDE THE PURPOSES FOR WHICH MONIES IN THE FUND MAY BE USED; TO 6
CREATE THE AI WORKFORCE IMPACT ADVISORY COUNCIL AND TO PROVIDE FOR 7
THE COMPOSITION OF THE COUNCIL; AND FOR RELATED PURPOSES. 8
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI: 9
SECTION 1. This act shall be known and may be cited as the 10
"Mississippi Human Capital Supplemental Tax Act". 11
SECTION 2. The Legislature finds that: 12
(a) Artificial intelligence and automation technologies 13
are rapidly transforming Mississippi's economy and labor market; 14
(b) While technological advancement benefits the 15
state's competitiveness, the displacement of human workers creates 16
social and economic costs that warrant public investment in 17
workforce transition; 18
(c) Industries that realize productivity gains and cost 19
savings through AI-driven workforce displacement should contribute 20
to the re-skilling and retraining of affected workers; 21
H. B. No. 1810 *HR43/R1884* ~ OFFICIAL ~
26/HR43/R1884
PAGE 2 (BS\KP)

(d) A sustainable workforce development system requires 22
dedicated funding to ensure Mississippi workers can adapt to 23
changing economic conditions. 24
SECTION 3. (1) As used in this section, the following words 25
and phrases shall have the meanings ascribed in this subsection 26
unless the context clearly requires otherwise: 27
(a) "Artificial Intelligence (AI)" means any system or 28
technology that performs tasks typically requiring human 29
intelligence, including, but not limited to, machine learning, 30
natural language processing, computer vision, robotics, and 31
automated decision-making systems. 32
(b) "AI displacement" means the measurable reduction in 33
human employment directly attributable to the implementation of AI 34
systems or technologies. 35
(c) "Baseline employment level" means the number of 36
full-time equivalent employees in a specific job category during 37
the tax year immediately preceding the implementation of AI 38
systems. 39
(d) "Covered employer" means any person, corporation, 40
partnership, or business entity operating in Mississippi that: 41
(i) Employs fifty (50) or more persons; and 42
(ii) Implements AI systems that result in AI 43
displacement. 44
(e) "Department" means the Mississippi Department of 45
Revenue. 46
H. B. No. 1810 *HR43/R1884* ~ OFFICIAL ~
26/HR43/R1884
PAGE 3 (BS\KP)

(f) "Displaced position" means a full-time equivalent 47
position eliminated or left unfilled due to AI implementation, 48
calculated on an annual basis. 49
(g) "Full-Time Equivalent (FTE)" means a standard of 50
two thousand eighty (2,080) hours of work annually. 51
(2) (a) There is hereby levied upon every covered employer 52
a Human Capital Supplemental Tax based on the number of displaced 53
positions resulting from AI implementation. The tax shall be 54
assessed as follows: 55
(i) For the first ten (10) displaced positions: 56
Five Thousand Dollars ($5,000.00) per position per year; 57
(ii) For displaced positions eleven (11) through 58
fifty (50): Seven Thousand Five Hundred Dollars ($7,500.00) per 59
position per year; and 60
(iii) For displaced positions fifty-one (51) and 61
above: Ten Thousand Dollars ($10,000.00) per position per year. 62
(b) The tax levied under this section shall be assessed 63
annually based on the cumulative AI Displacement measured from the 64
baseline employment level. 65
(c) The tax rates specified in paragraph (a) of this 66
subsection shall be phased in as follows: 67
(i) Tax year one (1): fifty percent (50%) of the 68
specified rates; 69
(ii) Tax year two (2): seventy-five percent (75%) 70
of the specified rates; and 71
H. B. No. 1810 *HR43/R1884* ~ OFFICIAL ~
26/HR43/R1884
PAGE 4 (BS\KP)

(iii) Tax year three (3) and thereafter: one 72
hundred percent (100%) of the specified rates. 73
(d) A covered employer may claim a credit against the 74
tax liability under this section equal to: 75
(i) One hundred percent (100%) of documented costs 76
for retraining displaced workers for positions within the same 77
company, up to Seven Thousand Five Hundred Dollars ($7,500.00) per 78
worker; 79
(ii) Seventy-five percent (75%) of documented 80
costs for funding approved external workforce development programs 81
for displaced workers, up to Five Thousand Dollars ($5,000.00) per 82
worker. 83
(e) A covered employer that creates new positions in 84
Mississippi requiring skills distinct from displaced positions may 85
claim a credit of Three Thousand Dollars ($3,000.00) per new FTE, 86
up to fifty percent (50%) of the total tax liability under this 87
section. 88
(f) The department may grant temporary exemptions or 89
payment plans for employers demonstrating significant financial 90
hardship. 91
(g) Positions eliminated through documented natural 92
attrition (retirement, voluntary resignation) and not refilled due 93
to AI implementation shall be assessed at fifty percent (50%) of 94
the applicable tax rate for the first two (2) years. 95
H. B. No. 1810 *HR43/R1884* ~ OFFICIAL ~
26/HR43/R1884
PAGE 5 (BS\KP)

(3) (a) Each covered employer shall file an annual Human 96
Capital Impact Statement with the department by April 15 following 97
the close of the tax year, including: 98
(i) Baseline employment level by job category; 99
(ii) Current employment level by job category; 100
(iii) Description of AI systems implemented; 101
(iv) Number of displaced positions; 102
(v) Calculation of tax liability; and 103
(vi) Documentation of any claimed credits or 104
exemptions. 105
(b) Covered employers shall maintain records supporting 106
their filings for a period of five (5) years. 107
(c) The Human Capital Impact Statement shall be 108
certified by a chief executive officer or chief financial officer 109
under penalty of perjury. 110
(4) (a) There is hereby created in the State Treasury a 111
special fund to be known as the "Mississippi Workforce Transition 112
and Development Fund". The fund shall consist of all revenues 113
collected under this act; any federal grants or private donations 114
designated for workforce development; and interest earnings on 115
monies in the fund. Monies in the fund shall be appropriated by 116
the Legislature exclusively for: 117
(i) Skills training and re-skilling programs for 118
workers displaced by AI; 119
H. B. No. 1810 *HR43/R1884* ~ OFFICIAL ~
26/HR43/R1884
PAGE 6 (BS\KP)

(ii) Apprenticeship and on-the-job training 120
initiatives; 121
(iii) Educational partnerships with community 122
colleges and technical schools; 123
(iv) Career counseling and job placement services; 124
(v) Support services including transportation and 125
childcare assistance during training; 126
(vi) Grants to regional workforce development 127
organizations; and 128
(vii) Administration of workforce development 129
programs (not to exceed five percent (5%) of annual fund 130
revenues). 131
The Mississippi Department of Employment Security, in 132
consultation with the Mississippi Community College Board, shall 133
administer the fund and develop program guidelines. 134
(5) The department shall have authority to audit covered 135
employers to ensure compliance with this section. 136
(6) (a) There is hereby created the AI Workforce Impact 137
Advisory Council. The council shall consist of: 138
(i) The Executive Director of the Mississippi 139
Department of Employment Security (Chair); 140
(ii) The Executive Director of the Mississippi 141
Development Authority; 142
(iii) The Executive Director of the Mississippi 143
Community College Board; 144
H. B. No. 1810 *HR43/R1884* ~ OFFICIAL ~
26/HR43/R1884
PAGE 7 (BS\KP)

(iv) Three (3) representatives from industries 145
utilizing AI, appointed by the Governor; 146
(v) Three (3) representatives from labor or 147
workforce advocacy organizations, appointed by the Governor; and 148
(vi) Two (2) workforce development experts, 149
appointed by the Governor. 150
(b) The council shall: 151
(i) Review the implementation and effectiveness of 152
this section annually; 153
(ii) Recommend adjustments to tax rates and 154
structure; 155
(iii) Identify emerging workforce development 156
needs; 157
(iv) Coordinate with stakeholders on transition 158
strategies; and 159
(v) Submit an annual report to the Legislature by 160
January 15. 161
(7) The department is authorized to promulgate rules and 162
regulations necessary to implement and enforce this section, 163
including, but not limited to: 164
(a) Procedures for calculating displaced positions; 165
(b) Documentation requirements for baseline employment; 166
(c) Standards for qualifying AI systems; 167
(d) Processes for claiming credits and exemptions; and 168
(e) Audit procedures and protocols. 169
H. B. No. 1810 *HR43/R1884* ~ OFFICIAL ~
26/HR43/R1884
PAGE 8 (BS\KP)
ST: "Mississippi Human Capital Supplemental Tax
Act"; create.
SECTION 4. This act shall take effect and be in force from 170
and after January 1, 2027. 171