The legislation contains a number of important incentives for
gulf coast businesses to rebuild and expand and incentives to
attract new investment and new businesses to the affected areas.
As expected, the final legislation creates the Gulf Opportunity
Zone from among selected areas of the affected states.
The Industrial Development Revenue Bond Program reduces the interest
costs of financing projects for companies through the issuance
of both taxable and tax-exempt bonds. Sales tax exemptions
are granted for this type of public financing. Other tax incentives,
such as those through the Mississippi Rural Economic Development
Assistance Program (RED) as described in a subsequent section
of this brochure, may be available. Ad valorem exemptions may
be granted if approved by the appropriate city and county.
The Mississippi Small Enterprise Development Finance Program
(SED) enables the Mississippi Business Finance Corporation
(MBFC) to make loans to qualified private companies that will
increase employment and investment in the State. The State
of Mississippi issues general obligation bonds as the source
of funding under the SED Program. The bonds are issued on a
composite basis. The costs of issuance are prorated to each
company participating in the issue, allowing companies to obtain
tax exempt financing that would otherwise be unavailable due
to prohibitive costs.
This program provides tax-exempt financing for small projects,
and gives banks in the State, which meet MBFC criteria, an
opportunity to issue letters of credit to support these efforts.
The combination of lower than market interest rates and a fixed
term make this program an attractive alternative for projects
requiring loans of $4 million or less. Sales tax exemptions
are granted for this type of public financing. Other tax incentives,
such as those through the Mississippi Rural Economic Development
Assistance Program (RED), as described in a subsequent section
of this brochure, may be available. Ad valorem exemptions may
be granted if approved by the appropriate city and county.
The Mississippi Rural Economic Development Assistance Program
(RED), administered by the Mississippi Business Finance
Corporation (MBFC), is a program designed to enhance projects
which are to be financed through the Industrial Development
Revenue Bond Program (IRB) and the Small Enterprise Development
Program (SED). Companies that meet eligibility requirements to
finance projects through the IRB and SED Programs may qualify to
receive Mississippi corporate income tax credits and ad valorem
exemptions under the RED Program. Eligible companies under the
IRB Program are manufacturing facilities, processing facilities,
certain warehouse and distribution centers, certain
telecommunication and data processing companies, multi-state
national or regional headquarters, certain research and
development and technology intensive enterprises. Eligible
companies under the SED Program are manufacturers and
processors. Credit amounts available to an eligible company are
a function of the company's project-related debt service. The
annual debt service for a project includes all costs associated
with the issuance of bonds, letters of credit, annual service
fees, and principal and interest payments.
For companies eligible for the RED Program, a financing agreement
addressing the provisions of the RED Program will be required
as a part of the bond issue.
The Mississippi Loan Guaranty Program, administered by the Mississippi
Business Finance Corporation ("MBFC") acting on behalf
of the State of Mississippi, strengthens and builds the small
business concept in the State of Mississippi ("State")
by enabling small businesses to obtain term financing through
the use of loan guarantees. As a result of the loan guarantee
protection, lending institutions are more likely to provide
financing not otherwise available to small businesses by substantially
reducing their exposure in the event of defaults.
A summary Of Mississippi incentives for new and expanding industry.
