Mississippi Flexible Tax Incentive Act; revise definition of "qualified economic development project" and "qualified project" under.

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To: Ways and Means
MISSISSIPPI LEGISLATURE REGULAR SESSION 2026

By: Representative Crudup

HOUSE BILL NO. 4010

AN ACT TO AMEND SECTION 57-114-3, MISSISSIPPI CODE OF 1972, 1
TO REVISE THE DEFINITION OF THE TERM "QUALIFIED ECONOMIC 2
DEVELOPMENT PROJECT" AND "QUALIFIED PROJECT" FOR PURPOSES OF THE 3
MISSISSIPPI FLEXIBLE TAX INCENTIVE ACT; AND FOR RELATED PURPOSES. 4
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI: 5
SECTION 1. Section 57-114-3, Mississippi Code of 1972, is 6
amended as follows: 7
57-114-3. For purposes of this chapter, the following words 8
shall have the meanings ascribed herein unless the context 9
otherwise requires: 10
(a) "Affiliate" means, with respect to a specified 11
entity, (i) another person or entity that directly or indirectly, 12
through one or more intermediaries, controls or is controlled by 13
or is under common control with the specified person or entity, 14
where the term "control" means the ownership or possession, 15
directly or indirectly, of the power to direct more than fifty 16
percent (50%) of the voting equity securities or a similar 17
ownership interest in the specified controlled entity, or (ii) any 18
member of an affiliated group of corporations, of which the 19
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specified entity is also a member, which are each subject to 20
income taxation in Mississippi and may elect to file a combined 21
Mississippi income tax return in accordance with state law. 22
(b) "Authority" means the Mississippi Development 23
Authority. 24
(c) "Annual report" means the report described in 25
Section 57-114-13. 26
(d) "Applicable accounting rules" shall mean the 27
accounting principles generally recognized as applicable to a 28
qualified business or industry and pursuant to which such 29
qualified business or industry regularly prepares and maintains 30
its financial and accounting books and records, and which 31
specifically incorporate Generally Accepted Accounting Principles 32
or International Financial Reporting Standards, as appropriate. 33
(e) "Applicant" means any corporation, limited 34
liability company, partnership, person or sole proprietorship, 35
business trust or other legal entity and subunit or affiliate 36
thereof that applies to the authority, in the manner prescribed by 37
this chapter, seeking (i) certification by the authority that such 38
applicant is a qualified business or industry and that its 39
proposed new project or expansion of an existing business or 40
industrial operation is a qualified economic development project, 41
and (ii) an award in connection therewith of an mFlex tax 42
incentive. 43
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(f) "Average state or county wage" shall mean, as of 44
the project certification date, the lesser of the most recently 45
published average annual wage per person as determined and 46
published by the Mississippi Department of Employment Security for 47
the state or the county in which the qualified project is or will 48
be located; provided that, if a qualified project is or will be 49
located in two (2) or more counties, the average state or county 50
wage, as used in this chapter, shall mean, as of the project 51
certification date, only the most recently published average 52
annual wage per person as determined and published by the 53
Mississippi Department of Employment Security for the state. 54
(g) "Average employer wage" means the qualified annual 55
payroll for all new full-time jobs created in the State of 56
Mississippi by a qualified business or industry divided by the 57
number of new full-time jobs thereof for which such qualified 58
annual payroll was paid or is otherwise payable. 59
(h) "Base full-time job" means a job (i) for which an 60
employee was already hired by the qualified business or industry 61
before, and is employed as of, the project certification date; 62
(ii) that offers a minimum of one thousand eight hundred twenty 63
(1,820) hours of an employee's time per year (i.e., thirty-five 64
(35) hours per week on average) for a normal four (4) consecutive 65
quarter period of the qualified business or industry's operations 66
or a job for which the employee was hired before, and is employed 67
as of, the project certification date and is compensated based on 68
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one thousand eight hundred twenty (1,820) hours for such annual 69
period (including in each case an employee who, after hiring, 70
elects to take unpaid time off or is on short-term or long-term 71
disability); and (iii) the employee holding such job receives 72
salary or wages subject to state income tax withholdings. The 73
term "base full-time job" also means a base-leased employee. 74
Part-time jobs may not be combined to add up to a base full-time 75
job. 76
(i) "Base-leased employee" means a nontemporary 77
employee: 78
(i) Who was leased by the qualified business or 79
industry before the project certification date from another 80
business or enterprise that is 1. in the business of leasing 81
employees, and 2. is registered with the Office of the Secretary 82
of State and qualified to do business in the state; 83
(ii) Who is leased as of the project certification 84
date; 85
(iii) Who is not otherwise an employee of such 86
qualified business or industry; 87
(iv) Who, as of the project certification date, 88
was already performing services for, and under the supervision of, 89
the qualified business or industry pursuant to a leasing agreement 90
between the qualified business or industry and such other employee 91
leasing firm; 92
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(v) Whose job-performing services for the 93
qualified business or industry offers a minimum of one thousand 94
eight hundred twenty (1,820) hours of an employee's time per year 95
(i.e., thirty-five (35) hours per week on average) for an entire 96
normal work year of the qualified business or industry's 97
operations or a job for which the employee is leased before the 98
project certification date and is compensated based on one 99
thousand eight hundred twenty (1,820) hours for such annual period 100
(including in each case an employee who, after being leased, 101
elects to take unpaid time off or is on short-term or long-term 102
disability); and 103
(vi) Whose job receives salary or wages subject to 104
state income tax withholdings. Individuals employed by an 105
independent contractor performing one or more services for the 106
qualified business or industry pursuant to a services or 107
management agreement (e.g., security services, landscaping 108
services, and cafeteria management and food services) shall not be 109
considered as base-leased employees. 110
(j) "Contractor tax" shall mean the tax levied by 111
Section 27-65-21, except for the tax upon the sale of 112
manufacturing or processing machinery for a manufacturer or custom 113
processor. 114
(k) "Construction contract" shall mean any contract or 115
portion of any contract for any one or more of the activities 116
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described in Section 27-65-21 for which the contractor tax applies 117
and is payable by the contractor that is party thereto. 118
(l) "Manufacturing machinery," as used in this chapter, 119
shall have the same meaning ascribed to such term in Section 120
27-65-11, as interpreted by any regulations promulgated by the 121
Department of Revenue with respect to such section. 122
(m) "mFlex agreement" means the written agreement 123
entered into between a qualified business or industry and the 124
authority in accordance with Section 57-114-7(4)(c). 125
(n) "mFlex tax incentive" means the tax incentive 126
authorized by this chapter to be calculated and awarded by the 127
authority, and thereafter applied as a credit to offset state 128
taxes, in accordance with, and subject to, this chapter. 129
(o) "Minimum job creation requirement" means the 130
creation by the qualified business or industry, following the 131
project certification date, of at least ten (10) new full-time 132
jobs in the state. 133
(p) "Minimum qualified investment" means a qualified 134
investment of not less than Two Million Five Hundred Thousand 135
Dollars ($2,500,000.00). 136
(q) "New full-time job" means a job: 137
(i) For which an employee is hired by the 138
qualified business or industry after the project certification 139
date; 140
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(ii) That offers a minimum of one thousand eight 141
hundred twenty (1,820) hours of an employee's time per year (i.e., 142
thirty-five (35) hours per week on average) for a normal four (4) 143
consecutive quarter period of the qualified business or industry's 144
operations or a job for which the employee is hired after the 145
project certification date and is compensated based on one 146
thousand eight hundred twenty (1,820) hours for such annual period 147
(including in each case an employee who, after hiring, elects to 148
take unpaid time off or is on short-term or long-term disability); 149
and 150
(iii) The employee holding such job receives 151
salary or wages subject to state income tax withholdings. The 152
term "new full-time job" also means new-leased employee. 153
Part-time jobs may not be combined to add up to a new full-time 154
job. 155
(r) "New-leased employee" means a nontemporary 156
employee: 157
(i) Who is leased by the qualified business or 158
industry after the project certification date from another 159
business or enterprise that is 1. in the business of leasing 160
employees, and 2. is registered with the Office of the Secretary 161
of State and qualified to do business in the state; 162
(ii) Who is not otherwise an employee of such 163
qualified business or industry; 164
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(iii) Who performs services for the qualified 165
business or industry pursuant to a leasing agreement between the 166
qualified business or industry and such other employee-leasing 167
firm; 168
(iv) Whose job-performing services for the 169
qualified business or industry offers a minimum of one thousand 170
eight hundred twenty (1,820) hours of an employee's time per year 171
(i.e., thirty-five (35) hours per week on average) for an entire 172
normal work year of the qualified business or industry's 173
operations or a job for which the employee is leased after the 174
project certification date and is compensated based on one 175
thousand eight hundred twenty (1,820) hours for such annual period 176
(including in each case an employee who, after being leased, 177
elects to take unpaid time off or is on short-term or long-term 178
disability); and 179
(v) Whose job receives salary or wages subject to 180
state income tax withholdings. Individuals employed by an 181
independent contractor performing one or more services for the 182
qualified business or industry pursuant to a services or 183
management agreement (e.g., security services, landscaping 184
services, and cafeteria management and food services) shall not be 185
considered as new-leased employees. 186
(s) "Nonmanufacturing equipment" means all tangible 187
personal property that is not manufacturing machinery, including, 188
but not limited to, office furniture, fixtures, office computers 189
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and communications equipment, and warehouse equipment such as 190
racking and shelving. 191
(t) "Part-time job" means a job (i) for which an 192
employee is hired by the qualified business or industry that 193
requires fewer than one thousand eight hundred twenty (1,820) 194
hours of an employee's time per year (i.e., requires fewer than 195
thirty-five (35) hours per week on average) for an entire normal 196
work year of the qualified business or industry's operations or a 197
job for which the employee is hired and is compensated based on 198
fewer than one thousand eight hundred twenty (1,820) hours for 199
such annual period; and (iii) for which the employee holding such 200
job receives salary or wages subject to state income tax 201
withholdings. 202
(u) "Project certification date" means the actual date 203
of the authority's certification, or the effective date of 204
certification determined and prescribed by the authority, of the 205
qualified business or industry and its qualified economic 206
development project as eligible for the state tax credits 207
determined and awarded by the authority, as authorized by, and in 208
accordance with, this chapter. 209
(v) "Qualified annual payroll" means the sum of the 210
annual salary and wages for new full-time jobs of the qualified 211
business or industry, excluding the amount or value of any 212
benefits that are not subject to state income taxes. 213
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(w) "Qualified business or industry" means any 214
corporation, limited liability company, partnership, person or 215
sole proprietorship, business trust or other legal entity and 216
subunit or affiliate thereof, which makes or causes to be made the 217
minimum qualified investment in, and/or satisfies or causes to be 218
satisfied the minimum job creation requirement for, a qualified 219
economic development project. 220
(x) "Qualified economic development project" or 221
"qualified project" means the location in the state of one or more 222
of the following enumerated enterprises for which a corporation, 223
limited liability company, partnership, sole proprietorship, 224
business trust or other legal entity, or subunit or affiliate 225
thereof, makes or causes to be made the minimum qualified 226
investment and/or satisfies or causes to be satisfied the minimum 227
job creation requirement: 228
(i) A new warehouse and/or distribution enterprise 229
or an expansion of an existing warehouse and/or distribution 230
enterprise; provided that, in any such instance, such warehouse 231
and/or distribution enterprise or expansion thereof is certified 232
by the authority to qualify as such; 233
(ii) A new manufacturing, remanufacturing, 234
assembly, processing and/or refinery enterprise or an expansion of 235
an existing manufacturing, remanufacturing, assembly, processing 236
and/or refinery enterprise; provided that, in any such instance, 237
such manufacturing, remanufacturing, assembly, processing and/or 238
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refinery enterprise or expansion thereof is certified by the 239
authority to qualify as such; 240
(iii) A new research or research and development 241
enterprise or an expansion of an existing research or research and 242
development enterprise; provided that, in any such instance, such 243
research and development enterprise or an expansion thereof is 244
certified by the authority to qualify as such; 245
(iv) A new regional or national headquarters of 246
the qualified business or industry or an expansion of an existing 247
regional or national headquarters of the qualified business or 248
industry; provided that, in any such instance, such regional or 249
national headquarters or expansion thereof is certified by the 250
authority to qualify as such; 251
(v) An air transportation, repair and/or 252
maintenance enterprise or an expansion of an existing air 253
transportation, repair and/or maintenance enterprise; provided 254
that, in either instance, such air transportation, repair and/or 255
maintenance enterprise or expansion thereof is certified by the 256
authority to qualify as such; 257
(vi) A ship or other maritime vessel or barge 258
transportation, repair and/or maintenance enterprise or an 259
expansion of an existing ship or other maritime vessel or barge 260
transportation, repair and/or maintenance enterprise; provided 261
that, in either instance, the ship or other maritime vessel or 262
barge transportation, repair and/or maintenance enterprise or 263
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expansion thereof is certified by the authority to qualify as 264
such; 265
(vii) A new data/information processing enterprise 266
or an expansion of an existing new data/information processing 267
enterprise; provided that, in any such instance such 268
data/information processing enterprise or expansion thereof is 269
certified by the authority to qualify as such; 270
(viii) A new technology intensive enterprise or an 271
expansion of an existing technology intensive enterprise; provided 272
that, in either instance, the technology intensive enterprise or 273
expansion thereof is certified by the authority to qualify as 274
such; provided further, that a business or enterprise primarily 275
engaged in creating computer programming codes to develop 276
applications, websites and/or software shall qualify as a 277
technology intensive enterprise; 278
(ix) A new telecommunications enterprise 279
principally engaged in the creation, display, management, storage, 280
processing, transmission and/or distribution, for compensation, of 281
images, text, voice, video or data by wire or by wireless means, 282
or engaged in the construction, design, development, manufacture, 283
maintenance or distribution for compensation of devices, products, 284
software or structures used in the above activities, or an 285
expansion of an existing telecommunications enterprise as herein 286
described; provided that, in any such instance, any such 287
telecommunications enterprise or expansion thereof is certified by 288
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the authority to qualify as such; provided further, that 289
commercial broadcast radio stations, television stations or news 290
organizations primarily serving in-state markets shall not be 291
included within the definition of the term "telecommunications 292
enterprise"; 293
(x) A new data center enterprise principally 294
engaged in the utilization of hardware, software, technology, 295
infrastructure and/or workforce, to store, manage or manipulate 296
digital data, or an expansion of an existing data center 297
enterprise as herein described; provided that, in such instance, 298
any such data center enterprise or expansion thereof is certified 299
by the authority to qualify as such; 300
(xi) An enterprise utilizing mixed-use development 301
formats for projects and developments, including, but not limited 302
to: 303
1. Vertical mixed-use projects; 304
2. Horizontal mixed-use campuses; and 305
3. Developments that combine part or all of 306
residential, retail, office, and hospitality purposes. 307
(y) "Qualified investment" means any expenditures made 308
or caused to be made by the qualified business or industry 309
following the project certification date for construction, 310
installation, equipping and operation of a qualified economic 311
development project from any source or combination of sources, 312
excluding any funds contributed by the state or any agency or 313
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other political subdivision thereof, or by any local government or 314
any agency or other political subdivision thereof, to the extent 315
such expenditures can be capitalized under applicable accounting 316
rules or otherwise by the Internal Revenue Code, whether or not 317
the qualified business or industry elects to capitalize the same, 318
as reflected in its financial statements, including, but not 319
limited to, all costs associated with the acquisition, 320
installation and/or construction of, or capital leasehold interest 321
in, any buildings and other real property improvements, fixtures, 322
equipment, machinery, landscaping, fire protection, depreciable 323
fixed assets, engineering and design costs. 324
(z) "Reporting year" means the twelve-month period 325
ending on the last day of the month during which the annual 326
anniversary of a project certification date occurs, and for which 327
an annual report must be filed with the authority by a qualified 328
business or industry in accordance with Section 57-114-13. 329
(aa) "State" means the State of Mississippi. 330
(bb) "State tax" means: 331
(i) Any sales and use tax imposed on, and payable 332
directly to the Department of Revenue by, the qualified business 333
or industry in accordance with state law, except for contractor's 334
tax and the taxes levied by Section 27-65-24(1)(b); 335
(ii) All income tax imposed pursuant to law on 336
income earned by the qualified business or industry pursuant to 337
state law; 338
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ST: Mississippi Flexible Tax Incentive Act;
revise definition of "qualified economic
development project" and "qualified project"
under.
(iii) Franchise tax imposed pursuant to state law 339
on the value of capital used, invested or employed by the business 340
enterprise certified by the Mississippi Development Authority; and 341
(iv) Withholding tax required to be deducted and 342
withheld from employee wages pursuant to Section 27-7-301 et seq. 343
SECTION 2. This act shall take effect and be in force from 344
and after July 1, 2026. 345