Working & Investing


Development Incentives

Below is a summary of incentives available for Downtown Jackson.

LOCAL ECONOMIC DEVELOPMENT INCENTIVES

Ad Valorem (Property Tax) Abatement (Partial)

  • For the construction of a new building or improvement of an existing property (business or residential), the City of Jackson will exempt the property owner from taxes on the increased assessed value for up to 7 years.
  • This can be used in conjunction with other incentives/credits.

Contact the City of Jackson’s Department of Planning and Development at 601-960-1993.

Rehabilitation of Historic Assets

  • Any landmark, landmark site and property located within a historic district that has undergone approved restoration is eligible for partial tax abatement upon approval by the Historic Preservation Commission and the City Council. The abatement is applicable to any increase in taxes that occurs as a result of the improvement project.
  • Section 70-7 of the City of Jackson Ordinances provides for this abatement. The tax exemption of ad valorem taxes will not exceed a period of seven years.

Contact the City of Jackson’s Department of Planning and Development at 601-960-1851.

Tax Increment Financing (TIF) Bonds

  • Both the Jackson Municipal and Hinds County governments can issue Tax Increment Financing Bonds.
  • TIF bonds are bonds issued by a municipal or county government to pay a developer or property owner for infrastructure outlays made as part of a development or renovation.
  • TIF can pay for anything typically constructed for/provided by a city (recreation/parks, parking, streets, landscaping, infrastructure).

Contact the City of Jackson’s Department of Planning and Development at 601-960-1851, and Hinds County Economic Development Authority at 601-353-6056.

STATE ECONOMIC DEVELOPMENT INCENTIVES

State Historic 25% Tax Credit 

The Mississippi Department of Archives and History is responsible for the administration of the program, which provides for a state income tax credit equal to 25% of the qualified expenses of rehabilitating historic structures used for residential or business purposes.

  • To be eligible, the qualified rehabilitation expenditures must exceed:
  • $5,000 in the case of an owner-occupied dwelling, or
  • 50% of the total basis in the property in the case of all properties other than owner-occupied dwellings.
  • All work must meet the Secretary of the Interior’s Standards for Rehabilitation.
  • Only rehabilitation expenditures incurred after January 1, 2006, qualify.
  • Not-for-profit entities are ineligible to receive the credits.

Contact the Mississippi Department of Archives & History at 601-576-6940 for more information.

Sales and Tax Exemptions

Businesses that choose to construct or expand existing facilities in the Downtown area are eligible for a sales or use tax exemption for the component materials used in the construction or expansion of a building and machinery and equipment to be used therein. Adding production capacity which increases employment but does not physically expand the facility can also qualify for the exemption.Eligible enterprises include manufacturing facilities, processing facilities, technology intensive enterprises and data or information processing enterprises.

Contact the Mississippi Development Authority at 601-359-3552 for more information.

FEDERAL ECONOMIC DEVELOPMENT INCENTIVES

Federal Historic 20% Tax Credit:

To be eligible for the 20% rehabilitation tax credit, a project must also meet the following basic tax requirements of the Internal Revenue Code:

  • The building must be depreciable – commercial or rental.
  • The property must be placed in service (i.e., returned to use). Furthermore, the owner must hold the building for five full years after completing the rehabilitation, or pay back the credit.
  • The rehabilitation must be substantial, which means that during a 24-month period selected by the taxpayer, rehabilitation expenditures must exceed the greater of $5,000 or the adjusted basis of the building.
  • The building must be a certified historic structure when it is placed in service. 

Contact the Mississippi Department of Archives & History at 601-576-6940 for more information.

Federal Historic 10% Tax Credit:

The 10% tax credit is available for the rehabilitation of non-historic buildings that were built before 1936 and that will be used for income-producing purposes other than residential. 

  • The property must be depreciable – commercial.
  • Rehabilitation must be substantial, meaning that the cost of the rehabilitation must exceed the greater of either $5,000 or the adjusted basis of the property.
  • The 10% credit applies only to buildings rehabilitated for non-residential uses.

Contact the Mississippi Department of Archives & History at 601-576-6940 for more information.

New Markets Tax Credits

The NMTC Program attracts investment capital to low-income communities by permitting individual and corporate investors to receive a tax credit against their Federal income tax return in exchange for making equity investments in specialized financial institutions called Community Development Entities (CDEs). The credit totals 39 percent of the original investment amount and is claimed over a period of seven years (five percent for each of the first three years, and six percent for each of the remaining four years). The investment in the CDE cannot be redeemed before the end of the seven-year period.

The program allows certain qualified Community Development Entities (CDE’s) to compete for a certain allocation of tax credit amounts, which flow to investors who make Qualified Equity Investments (QEI’s), in certain Qualified Low-Income Community Investments (QLICI’s), administered by the CDE’s.

Hope Enterprise Corporation is extremely knowledgeable with the credits and was instrumental in starting the program in Mississippi. Call 601-944-4151 for more information.

MuniStrategies has in depth experience of the credits. Contact Alan Lange at 601-914-5642 for more information.