By: Mary Ellen Powell
Special to the DBJ
Businesses and industries located in parts of Mississippi could receive thousands
of dollars in tax credits under a new Federal program available in Mississippi.
In January, the state received one of only 12 Rural Renewal Community (RC)
designations given nationally by the U.S. Department of Housing and urban
Development. The program allows businesses and industries in the designated
area to receive valuable tax credits and incentives that will provide the
business with immediate tax relief. The RC program began January 1, 2002 and
continues through December 31, 2009. Mississippi’s designated area includes
portions of the 13 counties and 30 municipalities located in the central part
of the state.
All existing future businesses and industries located within the RC are eligible
to receive immediate benefits from this program. The four key benefits available
under the RC program include:
Wage Credits- which allows business owners to deduct up to $1,500 per year
per employee that works and lives within the designated RC area. This is seen
by most tax experts as the most beneficial tax credit available under the
RC program because it does not place a limit on the number of employees a
business is allowed to claim the credit for.
Increased Section 179 Deduction- Allows a qualified RC Business to expense
up to $59,000 of qualified property such as equipment and machinery acquired
each year during the period of the RC designation. While businesses not located
within the RC are limited to expending only $24,000 if qualified property
a year.
Commercial Revitalization Deduction- allows the State to allocate $12 million
per year, up to $10 million per project for commercial or industrial buildings
developed within the RC. A business once it receives an allocation from the
state can deduct up to $5 million in the year the building is placed in service
or deduct the full amount of eligible expenditures pro rata over 10 years.
Zero Percent Capital Gains Rate- applies to an interest in, or property of,
certain businesses operating in a RC, if the asset is acquired during the
period of the RC designation and held for a least five years. This incentive
provides small businesses looking to expand with a new resource tool for finding
the capital it needs to expand.
In addition to supplying more than 14,000 businesses and industries located
in the designated Mississippi Rural Community area with immediate tax relief,
the program will also supply the state with an excellent marketing tool for
economic growth. The RC program will allow the state and local economic developers
to compete more favorably for additional national and international businesses
looking to locate in areas with unique incentives for businesses and industries.
For more information concerning this program contact the Central Mississippi
Planning and Development District at (601) 981-1511. DBJ