Taxes and Credits

Property Tax

Counties and municipalities levy a property tax on real and tangible personal property. Most property is assessed at 15% of true value. Motor vehicles and utilities (excluding railroads) are assessed at 30% and owner-occupied residential properties at 10% of true value. Property is appraised and assessed by local assessors. Depreciation is allowed in determining true value. Tax rates are set by the political subdivision based on local budget requirements. Mississippi does not have a state property tax.

EXEMPTIONS

Counties and municipalities may grant an exemption on all property taxes, except school taxes, for a period of up to ten years. Eligible enterprises include warehouse and/or distribution centers, manufacturers, processors, refineries, research facilities, certain telecommunications and data processing companies, regional and national headquarters, movie industry studios, and air transportation and maintenance facilities.

County and municipal authorities may levy a fee-in-lieu of taxes on projects totaling over $100 million. The minimum fee cannot be less than one-third of the property tax levy which would be imposed. Eligible enterprises include warehouse and/or distribution centers, manufacturers, processors, refineries, research facilities, regional and national headquarters, air transportation and maintenance facilities, and regional shopping malls.

By taking advantage of Mississippi’s Free Port Warehouse law, manufacturers can be exempt from paying property taxes on property stored in a licensed Free Port Warehouse in the ratio that the value of shipments outside the State bears to the value of total shipments. For example, if 98% of the value of finished goods were shipped to destinations outside the State, then 98% of the value of the goods on January 1 would be exempt from property taxes.

Example

Assume that a plant is located within a municipality where the total of all property taxes is 78.5 mills. The total tax due is shown below:

Taxable Property	True Value
Land	$10,000
Buildings	1,500,000
Machinery and Equipment	700,000
Raw Materials	200,000
Finished Goods	500,000
Total	$2,910,000
Assessed Value: 15% x $2,910,000	$436,500
Tax due before exemptions: 78.5 mills x $436,500	$34,365

OTHER TAXES

State Unemployment Compensation Tax

Mississippi levies an unemployment compensation tax on the first $7,000 of an employee’s annual wages. The maximum rate is 5.4%. The minimum rate varies from year to year depending upon the general experience rate of the State. The minimum tax rate is 0.4%. New employers in the State are assigned a tax rate of 2.7% until such time as they establish an individual experience rate.

Workers’ Compensation

Employers in Mississippi having five or more employees must purchase workers’ compensation coverage through insurance carriers, or qualify with the Mississippi Workers ’ Compensation Commission as a self-insurer.

Compensation is up to two-thirds of the claimant’s average weekly wages for up to 450 weeks. Amounts are indexed on an annual basis. Compensation does not include medical payments.

Personal Income Tax

Individual income is taxed at the same rate as corporate income: 3% of the first $5,000 of taxable income, 4% of the next $5,000, and 5% of the balance. Individuals are allowed personal exemptions.