Mississippi Lawmaker Consider Big Tax Credit For BusinessesBy Jeffrey Hess | Published 06 Apr 2012 03:35pm |
Mississippi law makers are considering a tax credit for businesses in the state that some say could attract new industry to the state. MPB's Jeffrey Hess reports that there is concern about giving money to Mississippi businesses while state revenues are growing slowly.
Mississippi is one of a handful of states that levies taxes on the raw goods and finished and unfinished products businesses have in their inventory.
That tax, says Kathy Gelston with the Mississippi Development Authority, is always brought up when they try to attract to industry to the state.
"Every company that we talk with, that is a manufacturer or a distribution center; we start out in a negative position because Mississippi taxes something other states don't tax. The larger the amount of inventory they have in the state the larger the issue that is," Gelston said.
That tax is paid to local communities but state lawmakers are considering offering a state tax credit to offset that tax, and in some cases, eliminate it entirely.
If the bill passes it will phase in over time but could wind costing the state 120-million dollars a year.
At a recent Stennis press luncheon in Jackson, Senator Hob Bryan of Amory says the credit would unfairly redistribute state funds among Mississippi's 82 counties.
"If your county isn't particularly getting a lot out of the inventory tax, and many are not, it is a bit much that first of all you don't have the advantage of having the inventory there to tax. And secondly we are going to tax your citizens and tote that money down to people that are paying inventory tax in more affluent counties," Bryan said.
Supporters of the tax credit argue that giving businesses a break would lead to more jobs and economic activity, offsetting the impact on the state coffers.
Representative Hank Zuber of Ocean Springs says it is wrong to look at the tax credit 'in a vacuum'.
"The amount of economic transactions it will create. The amount of sales tax revenue. The amount income tax revenue it will create. So I think once you add all of those other factors up, it will more than make up for any hit on the general fund," Zuber said.
Separate inventory tax credit bills have passed both chambers and are currently being considered by the house and senate committees that deal with taxation.
The deadline for action on the bills is April 17th.
BACK TO TOP
BACK TO TOP
CommentsMPB will not tolerate obscenities, threats/personal attacks, hate speech, material that is ethnically or racially offensive, abusive comments, comments off topic and spam, to name a few. You can see a complete list of the MPB guidelines by viewing our terms of service. If you spot a comment you think violates these guidelines, report it to the moderators by clicking "x" next to the comment, then "report”. MPB reserves the right to adjust these guidelines. If you have a suggestion, please contact us.
BACK TO TOP