Mississippi Flexible Tax Incentive Act; revise method of determining tax incentive for certain qualified economic development projects.

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To: Ways and Means
MISSISSIPPI LEGISLATURE REGULAR SESSION 2026

By: Representative Crudup

HOUSE BILL NO. 1861

AN ACT TO AMEND SECTION 57-114-9, MISSISSIPPI CODE OF 1972, 1
TO REVISE THE METHOD OF DETERMINING THE TOTAL AMOUNT OF THE 2
INITIAL AMOUNT OF MFLEX TAX INCENTIVE UNDER THE MISSISSIPPI 3
FLEXIBLE TAX INCENTIVE ACT FOR A CERTIFIED APPLICANT WITH A 4
QUALIFIED ECONOMIC DEVELOPMENT PROJECT THAT IS LOCATED WITHIN A 5
FEDERALLY DESIGNATED QUALIFIED OPPORTUNITY ZONE; TO AMEND SECTION 6
57-114-13, MISSISSIPPI CODE OF 1972, IN CONFORMITY THERETO; TO 7
BRING FORWARD SECTION 57-114-7, MISSISSIPPI CODE OF 1972, WHICH IS 8
A SECTION OF THE MISSISSIPPI FLEXIBLE TAX INCENTIVE ACT, FOR THE 9
PURPOSES OF POSSIBLE AMENDMENT; AND FOR RELATED PURPOSES. 10
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI: 11
SECTION 1. Section 57-114-9, Mississippi Code of 1972, is 12
amended as follows: 13
57-114-9. Calculation and application of an mFlex tax 14
incentive award. (1) Except as otherwise provided in subsection 15
(2) of this section, the total amount of the initial mFlex tax 16
incentive determined and awarded by the authority to the certified 17
applicant shall be calculated by the authority as follows: 18
(a) Subject to paragraph (f) below, one and one-half 19
percent (1.5%) of the total purchase or sales price, or value, 20
including any installation costs thereof, as applicable, of all 21
manufacturing or processing machinery acquired, leased or 22
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otherwise moved into the state following the project certification 23
date to establish and equip the qualified economic development 24
project; plus 25
(b) Subject to paragraph (f) below, seven percent (7%) 26
of the total purchase or sales price, or value, including any 27
installation costs thereof, as applicable, of all nonmanufacturing 28
equipment, other than tagged over-the-road vehicles, acquired, 29
leased or otherwise moved into the state following the project 30
certification date to establish and equip the qualified economic 31
development project; plus 32
(c) Subject to paragraph (f) below, two percent (2%) of 33
the total contract price or compensation paid to any contractor 34
pursuant to any construction contract entered into following the 35
project certification date by the qualified business or industry 36
or any affiliate thereof, to construct, build, erect, repair or 37
add to any building, facility, structure or other improvement to 38
real property described in Section 27-65-21(1)(a)(i) to establish 39
and construct the qualified economic development project; plus, if 40
applicable; 41
(d) To the extent that the average employer wage is 42
equal to or more than seventy-five percent (75%) of the average 43
state or county wage, then an additional fifteen percent (15%) of 44
the product derived by multiplying the average employer wage by 45
the number of new full-time jobs; plus, if applicable; 46
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(e) (i) To the extent that 1. the qualified economic 47
development project is an enterprise enumerated in Section 48
57-114-3(x)(i) or (x)(ii); 2. the number of new full-time jobs 49
totals fifty (50) or more; 3. the qualified investment totals Ten 50
Million Dollars ($10,000,000) or more; 4. the average employer 51
wage is equal to or more than one hundred ten percent (110%) of 52
the average state or county wage; and 5. all full-time employees 53
are eligible for and offered health insurance coverage funded in 54
whole or at least fifty percent (50%) by the qualified business or 55
industry (or by a leasing company with respect to leased 56
employees), then an additional thirty percent (30%) of the product 57
derived by multiplying the average employer wage by the number of 58
new full-time jobs; or 59
(ii) To the extent that subparagraph (i) of this 60
paragraph (e) does not apply, but 1. the number of new full-time 61
jobs totals twenty-five (25) or more; 2. the average employer wage 62
is equal to or more than one hundred twenty-five percent (125%) of 63
the average state or county wage; and 3. all full-time employees 64
are eligible for and offered health insurance coverage funded in 65
whole or at least fifty percent (50%) by the qualified business or 66
industry (or by a leasing company with respect to leased 67
employees), then an additional thirty percent (30%) of the product 68
derived by multiplying the average employer wage by the number of 69
new full-time jobs; provided, however, that the initial mFlex tax 70
incentive award amount determined by the authority and awarded on 71
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the project certification date shall be based upon estimates 72
provided by the qualified business or industry to the authority 73
with respect to paragraphs (a) through (d) of this section, which 74
estimates shall be memorialized as project performance measures 75
agreed to by the qualified business or industry in the mFlex 76
agreement; provided, further, that such initial award amount shall 77
be subject to any subsequent adjustments made by the authority 78
pursuant to Section 57-114-13; 79
(f) To the extent that all or any portion of the 80
purchases to establish a qualified economic development project 81
which are financed by proceeds from bonds issued pursuant to 82
Section 57-10-201 et seq. or Section 57-10-401 et seq., the mFlex 83
tax incentive determined in accordance with this section shall 84
exclude the amount calculated in accordance with paragraphs (a), 85
(b) and (c) above; provided that, this paragraph (f) shall not 86
apply in determining the mFlex tax incentive for a qualified 87
economic development project to the extent that (i) the qualified 88
economic development project is an expansion of an existing 89
project, (ii) all or any portion of the purchases to establish the 90
existing project were financed by proceeds from bonds issued 91
pursuant to Section 57-10-201 et seq. or Section 57-10-401 et 92
seq., and (iii) no purchases to establish the expansion 93
constituting a qualified economic development project are financed 94
by proceeds from bonds issued pursuant to Section 57-10-201 et 95
seq. or Section 57-10-401 et seq. 96
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(2) For a certified applicant with a qualified economic 97
development project that: 98
(a) Is located within a qualified opportunity zone, the 99
total amount of the initial mFlex incentive determined under 100
subsection (1) of this section shall be multiplied by one hundred 101
twenty-five percent (125%) and the product thereof shall be the 102
total amount of the initial mFlex incentive determined and awarded 103
by the authority to the certified applicant, instead of the amount 104
determined under subsection (1) of this section; or 105
(b) Is located within a qualified opportunity zone and 106
has at least five (5) new full-time jobs held by employees who 107
reside within such qualified opportunity zone, the total amount of 108
the initial mFlex incentive determined under subsection (1) of 109
this section shall be multiplied by one hundred fifty percent 110
(150%) and the product thereof shall be the total amount of the 111
initial mFlex incentive determined and awarded by the authority to 112
the certified applicant, instead of the amount determined under 113
subsection (1) of this section. For the purposes of this 114
subsection (2), the term "qualified opportunity zone" means and 115
has the same definition as such term has in 26 USC Section 116
1400Z-1. 117
SECTION 2. Section 57-114-13, Mississippi Code of 1972, is 118
amended as follows: 119
57-114-13. (1) Unless its mFlex agreement prescribes a 120
longer reporting period or additional reporting requirements, each 121
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qualified business or industry shall file an annual report with 122
the authority for each qualified economic development project 123
which has been certified, and for which any mFlex tax incentive 124
has been awarded, by the authority in accordance with this 125
chapter, for the longer of the following periods: (a) until the 126
reporting year during which all or any remaining portion of the 127
mFlex tax incentive amount awarded to such qualified business or 128
industry has been applied to offset state taxes, or (b) until the 129
seventh reporting year, provided that an annual report shall in 130
either instance be due in the final reporting year prescribed 131
hereby or by the mFlex agreement. Each annual report shall be due 132
to the authority no later than the last business day of the month 133
following the quarter during which the annual anniversary of its 134
project certification date occurred. Each annual report shall 135
include the information set forth in this section, together with 136
any other information required to be provided by the qualified 137
business or industry pursuant to its mFlex agreement, for the 138
immediately preceding twelve-month period ending on the last day 139
of the month during which the annual anniversary of its project 140
certification date occurred. 141
(2) Each annual report submitted to the authority by a 142
qualified business or industry shall, at a minimum, contain the 143
following information: 144
(a) The total qualified investment made between the 145
project certification date through the end of the reporting year, 146
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including a breakout of actual expenditures made by the qualified 147
business or industry for manufacturing machinery, nonmanufacturing 148
equipment and component building materials to establish and equip 149
the qualified economic development project; 150
(b) The incremental qualified investment made during 151
the reporting year, including a breakout of actual expenditures 152
made by the qualified business or industry for manufacturing 153
machinery, nonmanufacturing equipment and component building 154
materials to establish and equip the qualified economic 155
development project; 156
(c) If applicable, the total number of base full-time 157
jobs; 158
(d) The total number of people employed in new 159
full-time jobs as of the last day the year preceding the reporting 160
year; 161
(e) The total number of people employed in new 162
full-time jobs as of the last day the year of the reporting year; 163
(f) The average employer wage for the reporting year; 164
(g) The percentage and number, as of the last day of 165
the reporting year, of new full-time employees who are eligible 166
for and offered a health insurance coverage funded in whole or at 167
least fifty percent (50%) by the qualified business or industry 168
(or by a leasing company with respect to leased employees); 169
(h) A description of employee benefits, including but 170
not limited to, health, dental and/or vision insurance, retirement 171
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savings account, etc. made available to employees, as well as a 172
description of any employees to whom the benefits are not made 173
available (e.g., part-time employees); 174
(i) The total amount of the mFlex tax incentive awarded 175
thereto, which the qualified business or industry has already 176
applied and taken as a credit to offset state taxes through the 177
end of the reporting period; 178
(j) A list of all affiliates of the qualified business 179
or industry, including the Federal Employer Identification Number 180
for each affiliate, for which any state tax liability thereof has 181
been or is expected to be offset by all or some portion of the 182
mFlex tax incentives awarded to the qualified business or 183
industry, which list shall further identify (i) any affiliate of 184
the qualified business or industry that was not disclosed as such 185
on its application or annual report submitted for the prior 186
reporting period, whichever was more recent, but which has either 187
become an affiliate of the qualified business or industry as of 188
the date the current annual report or which the qualified business 189
or industry desires to utilize all or a portion of its mFlex tax 190
incentive as a credit to offset the affiliate's state tax 191
liability following the date of the current annual report; (ii) 192
any change in the name of any previously disclosed affiliate since 193
the date the qualified business or industry filed its application 194
or annual report for the prior reporting period, whichever was 195
more recent; (iii) any prior affiliate of the qualified business 196
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or industry disclosed as such on its application or annual report 197
for the prior reporting period, whichever was more recent, and 198
which is no longer an affiliate of the qualified business or 199
industry as of the date the current annual report; and (iv) any 200
affiliate of the qualified business or industry disclosed as such 201
on its application or annual report for the prior reporting 202
period, whichever was more recent, and which the qualified 203
business or industry no longer desires that the affiliate utilize 204
all or a portion of its mFlex tax incentive as a credit to offset 205
the affiliate's state tax liability following the date of the 206
current annual report. 207
(3) The authority shall prescribe a form or forms for the 208
annual report. 209
(4) Notwithstanding the obligation of a qualified business 210
or industry to file an annual report with the authority for each 211
qualified economic development project which has been certified, 212
and for which any mFlex tax incentive has been awarded, the 213
authority is authorized to request from the qualified business or 214
industry at any other time any of the information set forth herein 215
that must be included in an annual report for purposes of 216
determining whether a qualified business or industry has met any 217
of the project performance measures set forth in its mFlex 218
agreement on or before the respective deadlines imposed with 219
respect thereto. Upon any such written request by the authority, 220
the qualified business or industry shall, within thirty (30) days 221
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after receipt of the request, provide to the authority a certified 222
copy of the information requested. 223
(5) If a qualified business or industry fails to either file 224
an annual report with the authority on or before the deadline 225
mandated by subsection (1) of this section, or provide any 226
information requested by the authority pursuant to subsection (4) 227
of this section within the time period mandated by such 228
subsection, the authority shall provide written notice to the 229
qualified business or industry of the failure to report, and the 230
qualified business or industry shall have thirty (30) additional 231
days to cure the reporting failure following its receipt of the 232
notice. If the qualified business or industry thereafter fails to 233
file its annual report with the authority, or provide such 234
information requested by the authority within the thirty-day-cure 235
period, the authority is authorized to suspend or revoke, at the 236
discretion thereof, all or a portion of the amount of the mFlex 237
tax incentive previously awarded to the qualified business or 238
industry for its qualified economic development project. 239
(6) If a qualified business or industry either fails to 240
achieve or exceeds any project performance measure set forth in 241
its mFlex agreement within or for any time period required by such 242
agreement, the authority shall, following its (a) review of any 243
annual report filed by the qualified business or industry or of 244
any certified information provided by the qualified business or 245
industry pursuant to subsection (4) of this section, and (b) 246
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verification based upon such information that the qualified 247
business or industry either failed to achieve or exceeded any of 248
the project performance measures set forth in its mFlex agreement 249
within or for any time period required by such agreement, adjust 250
the mFlex tax incentive awarded thereto for its qualified economic 251
development project such that the award is no longer based upon 252
any one or more of the performance measures set forth in its mFlex 253
agreement, but is instead based upon one or more of the following, 254
as applicable, as of the end of the most recent reporting year for 255
which the annual report was filed: (a) the actual expenditures 256
made by the qualified business or industry for purposes of the 257
calculation prescribed by Section 57-114-9(1)(a), (b) and (c); and 258
(b)(i) the actual number of new full-time jobs created by the 259
qualified business or industry, together with (ii) the actual 260
average employer wage associated therewith, for purposes of the 261
calculations prescribed by Section 57-114-9(1)(d) and (e). 262
(7) A qualified business or industry and the authority may, 263
at any time, amend or restate an mFlex agreement in order to 264
modify the performance measures of the qualified business or 265
industry with respect to its qualified economic development 266
project, and in connection with such amendment or amendment and 267
restatement, the authority shall modify the amount of the mFlex 268
tax incentive awarded for the qualified economic development 269
project to comport with the modified performance measures; 270
provided that the modified award amount shall thereafter be 271
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subject to the adjustment requirements of subsection (6) of this 272
section. 273
(8) If the authority adjusts any mFlex tax incentive award 274
pursuant to subsection (6) or subsection (7) of this section, the 275
authority shall issue an amended certification of the 276
corresponding qualified economic development project, which shall 277
specify the amount of mFlex tax incentive award adjustment. The 278
authority shall forward the amended certification, along with any 279
other necessary information, to the Department of Revenue so that 280
the mFlex tax incentive award adjustment for the qualified 281
business or industry can be recorded by the Department of Revenue 282
and used to verify each state tax credit subsequently applied by 283
the qualified business or industry. 284
(9) If at any time the authority reduces the mFlex tax 285
incentive award granted for the qualified economic development 286
project to an amount less than the total amount of credits already 287
applied and taken by the qualified business or industry, or by one 288
or more affiliates thereof eligible to utilize such credit, to 289
offset state taxes thereof, the Department of Revenue shall charge 290
the qualified business or industry, or such affiliate or 291
affiliates, with an assessment for the amount of state taxes for 292
which no mFlex tax incentive is available, following such 293
reduction by the authority, for application as a tax credit, 294
beginning with those state taxes against which the qualified 295
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business or industry most recently applied the credit, and such 296
state tax assessment shall be immediately due and payable. 297
(10) Any portion of an mFlex tax incentive awarded to the 298
qualified business or industry by the authority for its qualified 299
economic development project pursuant to this chapter that has not 300
been applied, on or before the tenth annual anniversary of the 301
project certificate date, as a credit by such qualified business 302
or industry, or by one or more affiliates thereof eligible to 303
utilize such credit, to offset state taxes otherwise payable, 304
shall expire. 305
(11) Within thirty (30) days following the end of each 306
calendar quarter, the authority shall provide to the Governor, 307
Lieutenant Governor and the Speaker of the House of 308
Representatives a copy of each amendment to any certification 309
made, together with a copy of each amendment to any mFlex 310
agreement approved and executed, during the immediately preceding 311
calendar quarter. 312
SECTION 3. Section 57-114-7, Mississippi Code of 1972, is 313
brought forward as follows: 314
57-114-7. (1) The authority shall evaluate an application 315
to determine whether the applicant's proposed project is a 316
qualified economic development project and whether it is therefore 317
eligible for an award by the authority of an mFlex tax incentive, 318
as calculated in accordance with Section 57-114-9. 319
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(2) Upon approval of an applicant's application, the 320
authority shall issue a certification (a) designating the 321
applicant's project as a "qualified economic development project" 322
and eligible for the mFlex tax incentive authorized by this 323
chapter; (b) awarding the initial mFlex tax incentive calculated 324
pursuant to Section 57-114-9; and (c) imposing those mandatory 325
conditions pursuant to subsection (4) of this section and any 326
discretionary conditions otherwise imposed by the authority. 327
(3) Upon the issuance of the certification and execution of 328
the mFlex agreement by a qualified business or industry and the 329
authority, the qualified business or industry may apply the amount 330
of its mFlex tax incentive as a credit to offset (a) any state 331
taxes (except for withholding tax required to be deducted and 332
withheld from employee wages pursuant to Section 27-7-301 et 333
seq.), as incurred thereby, up to the full amount of the mFlex tax 334
incentive awarded by the authority for the associated qualified 335
economic development project, and (b) only up to twenty percent 336
(20%) of the mFlex tax incentive amount may be applied as a credit 337
during the course of any reporting year to offset withholding tax 338
deducted and withheld from employee wages pursuant to Section 339
27-7-301 et seq.; provided that the amount of the mFlex tax 340
incentive available to be applied as a credit to offset such state 341
taxes shall be subject to any subsequent adjustments made by the 342
authority to such award pursuant to Section 57-114-13, and any 343
performance requirements set out in the mFlex agreement. The 344
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amount of the mFlex tax incentive available to be applied as a 345
credit to offset any state taxes described in Section 346
57-114-3(bb)(i) shall be limited to those such taxes payable 347
directly by the qualified business or industry to the Department 348
of Revenue pursuant to a direct pay permit issued by the 349
Department of Revenue under Section 27-65-93. The amount of the 350
mFlex tax incentive available to be applied as a credit to offset 351
any state taxes may not be applied as a credit to offset any state 352
taxes incurred prior to the issuance of the certification by the 353
authority and execution of the mFlex agreement by the qualified 354
business or industry and the authority. 355
(4) The following conditions shall apply to each such 356
certification made, and each mFlex tax incentive awarded, by the 357
authority in accordance with this chapter: 358
(a) Any certification and mFlex tax incentive award 359
issued by the authority under this chapter is nontransferable and 360
cannot be applied, used or assigned to any other person or 361
business or tax account without prior approval by the authority, 362
except for one or more affiliates of the qualified business or 363
industry disclosed thereby on its application or in a subsequent 364
annual report submitted to the authority in accordance with this 365
chapter; 366
(b) No qualified business or industry may claim or use 367
the mFlex tax incentive awarded thereto under this chapter unless 368
the qualified business or industry is in full compliance with all 369
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state and local tax laws, and related ordinances, permits and 370
other applicable governmental approvals; and 371
(c) Each qualified business or industry must enter into 372
an mFlex agreement with the authority which sets out, at a 373
minimum, (i) the obligation of the business or industry to provide 374
an annual report to the authority pursuant to Section 57-114-13 375
that demonstrates the actual amount of its qualified investment, 376
including actual expenditures on manufacturing machinery, 377
nonmanufacturing equipment and component building materials, the 378
number of new full-time jobs created and maintained as a result of 379
the project, and any other relevant information as may be required 380
by the authority; and (ii) terms for readjustment or recapture of 381
all or a portion of the mFlex tax incentive awarded thereto 382
pursuant to Section 57-114-13 if the applicant 1. fails to satisfy 383
the minimum job creation requirement if certification of the 384
project is predicated on satisfaction of the minimum job creation 385
requirement and not the minimum qualified investment, or 2. fails 386
to satisfy the minimum qualified investment if certification of 387
the project is predicated on satisfaction of the minimum job 388
creation requirement and not the minimum qualified investment, 389
and/or 3. fails to otherwise satisfy any other additional 390
performance requirements of the qualified business or industry or 391
its qualified economic development project that are imposed by the 392
authority. 393
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ST: Mississippi Flexible Tax Incentive Act;
revise method of determining tax incentive for
certain qualified economic development projects.
(5) In addition to those mandatory conditions prescribed by 394
this chapter that apply to each certification and award of an 395
mFlex tax incentive made by the authority in accordance herewith, 396
the authority is authorized to impose any other conditions upon 397
any certification and award of an mFlex tax incentive made by the 398
authority as it shall find best promotes economic development in 399
the state. 400
(6) Upon certifying a qualified business or industry as 401
eligible for, and awarding, an mFlex tax incentive under this 402
chapter, the authority shall forward the certification along with 403
any other necessary information to the Department of Revenue so 404
that the mFlex tax incentive awarded to the qualified business or 405
industry can be recorded by the Department of Revenue and used to 406
verify each state tax credit subsequently applied by the qualified 407
business or industry. 408
(7) Within thirty (30) days following the end of each 409
calendar quarter, the authority shall provide to the Governor, 410
Lieutenant Governor and the Speaker of the House of 411
Representatives a copy of each certification made, together with a 412
copy of each mFlex agreement approved and executed, during the 413
immediately preceding calendar quarter. 414
SECTION 4. This act shall take effect and be in force from 415
and after July 1, 2026. 416