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Business Climate

Overview I-59 Technology Corridor State Corporate Income Taxes Ad Valorem Tax/Local Property Taxes

Corporate Franchise Tax State Sales and Use Tax Unemployment Insurance Workers Compensation

The Greater Hattiesburg Metropolitan Statistical Area (MSA), consisting of Forrest, Lamar, and Perry Counties, has seven industrial parks with sites available to fit your specifications. The Greater Hattiesburg MSA is the ideal place to grow a business, a family or a future: One of the most progressive areas in the state that offers all of the features that contribute to quality of life; low cost of living, a favorable business climate, recreation and leisure activities, and community and social services.

The economic base of the Greater Hattiesburg, MSA is very diverse. Primary employers fall within one of four categories: health care, education, military and manufacturing/distribution.

Some of our top employers include Forrest General Hospital, The University of Southern Mississippi, Camp Shelby and Wesley Medical Center to name a few. Our top manufacturing and distribution based industry includes companies like Koch Cellulose, Hattiesburg Paper Company, and Kohler Company.

Research shows that the typical commute for workers in the Hattiesburg MSA is 30 minutes or less. Several neighboring counties are within 30 minute commute of the major concentrations of employment in the Hattiesburg MSA.

The State of Mississippi is a Right-to-Work State and has a superb business climate for manufacturing. National publications have noted Mississippi’s success, and all attribute it to the pro-business attitude and service provided.

Mississippi has always been known for low taxes, strategic location and a skilled workforce. Now you can add something else to your list of reasons to do business in Mississippi: a fair legal climate.

The Tort Reform Act of 2004 ensures fairness in the courtroom for everyone. Not only does that mean better business conditions, it also translates into better jobs and healthcare for Mississippians.Mississippi businesses are subject to four basic taxes: corporate income tax, franchise tax, sales and use tax, and property tax. Tax credits or exemptions are available for qualified companies on all basic taxes except franchise tax.

Once specific needs of the project are identified, the economic development professionals with the Area Development Partnership (ADP) will work with you to develop the right incentive package for your location or expansion in the Greater Hattiesburg Area.

I-59 Technology Corridor

The I-59 Technology Corridor, located in the heart of the South, is a 168-mile span of Interstate 59 that has emerged into a network of high-tech industries. With more than 400 companies and 11,000 employees, the Corridor is surrounded by major markets such as Birmingham, Mobile, Jackson and New Orleans. With stops like Hattiesburg, Laurel, Meridian and Stennis Space Center, the Corridor locations have prospered greatly. The Corridor has become a region of technological advancements, including breakthroughs in the research and development of polymers as well as the production of aircraft engines, rocket motors and electrical transformers. Industries inside the corridor are benefiting from a strong infrastructure and are working together to produce superior products. Due to this type of cooperation, growth in the sector of the state has dramatically accelerated in the past five years and continues to produce more highly skilled jobs in the area. The I-59 Technology Corridor has Your Complete Package for high-tech industries.

Industries located inside the corridor include Owens-Illinois, Geo-Tek, Kohler Engines, GE Plastics, Delphi Energy & Engine Management, Lockheed Martin, Howard Industries, Essmueller, NASA, Boeing, Peavey Electronics, Hybrid Plastics, Convergy’s, Rexel, United Technologies, U.S. Navy Oceanography Center and Northrop Grumman to name a few.

Colleges and universities located in the Corridor include, The University of Southern Mississippi, Center for Higher Learning at Stennis, Mississippi State University-Meridian, Jones County Junior College, Pearl River Community College, Meridian Community College and William Carey College.

State Corporate Income Taxes

All corporations engaged in business activities in Mississippi are taxed on the net taxable income derived from those activities. The tax schedule is listed below:
Tax Rate

First $ 5,000 - 3 percent
Next $ 5,000 - 4 percent
Over $10,000 - 5 percent

In the case of multi-state manufacturing corporations, net business income from manufacturing operations which cannot be directly assigned to the Mississippi operation is apportioned to the State on the basis of a three-factor formula:

1. Ratio of property (book value) in Mississippi versus total property;
2. Ratio of payroll in Mississippi compared to total payroll; and
3. Ratio of sales attributable to Mississippi compared to total sales.

Please note that additional non-business income is added to the apportioned income. Mississippi allows a net operating loss to be carried over for the five years following the taxable year of such loss. The State, however, does not allow deductions of federal income taxes.

Ad Valorem Tax/Local Property Taxes

The Area Development Partnership works with city and county officials within the MSA for the company to receive up to a ten-year exemption on ad valorem taxation on the following properties:Real properties – land and improvements

• Furniture/fixtures
• Personal properties
• Raw materials
• Machinery and equipment
• Work in progress

The properties that are not eligible for exemption include:

• School district taxes
• Finished goods
• Rolling stock (automobiles, trucks)
• Special levies for reappraisals and support of state waterway districts

Since Mississippi does not have a state property tax, each county is responsible for setting and maintaining such tax. Each county within the Greater Hattiesburg MSA has a different millage rate which is paid per $1,000.00 of assessed valuation.

Corporate Franchise Tax

Mississippi’s franchise tax applies to most corporations doing business in the State. The rate is $2.50 per $1,000 of the value of capital used, invested or employed in the State. The tax base consists of capital stock issued and outstanding, surplus and undivided profits, and true reserves. However, the tax base cannot be less than the corporation’s assessed value of real and tangible personal property in Mississippi.For multi-state corporations, capital is apportioned to Mississippi on a formula/ratio basis. The ratio is calculated by dividing the sum of the book value of real and tangible personal property owned in the State plus the gross receipts received from business activity in the State by the sum of the book value of real and tangible total corporate personal property plus total corporate gross receipts received. The ratio is then applied to the total capital stock, surplus and undivided profits and true reserves to calculate the amount of capital apportioned to Mississippi. This amount is then multiplied by the franchise tax rate to obtain the amount of franchise tax owed.

State Sales and Use Tax

The general retail sales tax rate in Mississippi is 7 percent. However there is no sales tax on the following:

• Purchases of raw materials, processing chemicals, and or packaging materials.
• Direct purchases of construction materials, machinery, and equipment for businesses that are financed through certain bond programs.

In addition, the state offers additional sales tax incentives including the following:

• A 1.5 percent sales tax (instead of 7 percent) on machinery and parts used directly in manufacturing and on industrial electricity, natural gas, and fuels.
• Exemption of 50 percent of the sales tax liability for purchases of construction materials and equipment (100 percent with certain bond programs).

Unemployment Insurance
Employers are required to make a contribution on the first $7,000 of each employee’s wages. The initial rate is 2.7 percent. The minimum and maximum rates are 1.3 percent and 5.4 percent, respectively.

Workers Compensation
Employers having 5 or more employees must purchase workers’ compensation coverage through insurance carriers or qualify with the Mississippi Workers’ Compensation Commission as a self-insurer.

Compensation can be up to two-thirds of the state average weekly workers’ wages. The maximum time period for benefits per disability is 450 weeks.