JACKSON, MS (Mississippi News Now) -
Legislation making its way through the capitol is hoping to make doing business in Mississippi a little easier, by giving businesses a tax credit.
"When you're looking at the playing field in economic development, we're just at an unfair disadvantage," said John McKay, deputy director of government affairs with the Mississippi Manufactures Association.
McKay says the state's inventory tax is holding the state back from a competitive standpoint. It's the tax paid by businesses on raw goods and products held as part of their inventory.
"When we try to attract businesses that are looking to relocate or expand their operations, they have a hard time looking at Mississippi because we have this additional tax that other states don't have," said McKay.
Mississippi is one of only nine states with the tax which is collected at the local level. McKay says he understands many local governments depend on the tax, which put some in opposition of a tax break, but, he says there's a way for those local funds to stay intact.
To ensure local governments maintain a tax base, one measure being pushed is for those city and county governments to continuing collecting the tax. The business could then apply to the state for a reimbursement which could come in the form of a credit.
"We feel like that money coming back from the state to the business would enhance job creations, it would make Mississippi made products more accessible," said McKay.
Additional legislation would get rid of the tax altogether, but those lawmakers in opposition say getting rid of a tax may not be the best move with a state budget tighter than ever. Estimates put a potential loss to the state at more than $100 million dollars, but supports say that could be offset when new companies call Mississippi home.
"Overall, when businesses look at where they want to put a business, that's one of the things they look for is what is my tax structure going to look like in this state and if they can save a half million dollars a year going somewhere else, they'll do that," said McKay.
Bills from both the house and senate have passed their respective chambers and now sit with committees. A deadline to act on the bills is April 17th.
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