Mississippi is considered as one of the top tourism destinations in the United States and along with casino gambling has been instrumental in increasing revenues as well as economic gains for the state .These two industries have also witnessed a rise in the number of start-up companies in Mississippi especially in the resort towns of Gulfport, Bay St. Louis, and Biloxi and also in the Mississippi River towns of Greenville, Tunica Natchez, and Vicksburg. In fact, the state of Mississippi with $2.25 billion in gambling revenue is ranked sixth in the nation.
Business Growth Incentive for New Businesses
What makes Mississippi such a good destination for starting a new business? Today, Mississippi has a diverse industry base as it offers a strong transportation network and marketing advantages. Let’s look at some of the basic advantages that a start-up company in Mississippi can leverage on:
Advantage#1: The benefits of Incorporation or LLC formation
- Tax Exemption Programs: One of the highlights of forming a corporation in Mississippi is that your business entity will be able to benefit from several tax incentives and exemption programs. The two top programs are Industrial Property Tax Exemption and Manufacturing Investment Tax Credit program.
- Independent life: When you register a new business in Mississippi as an S Corporation, it will enjoy an independent life. This means that the incapacitation or death of a stockholder will not have a negative impact on the business operations.
- Federal taxation: If you register a new company in Mississippi as an S corporation then the corporation or firm will not pay any income tax. Instead, each shareholder or owners in the company will be liable to pay tax on their personal tax return.
- Loan Programs: If you are planning to establish a startup company in Mississippi, you may require a certain amount of funding. Hence, the state has implemented several programs that will ensure you can benefit from loan amounts based on the industry, the type of business, and the location. Some of the top loan and funding programs include Capital Access Contract Loan Program, Agribusiness Enterprise Loan Program (ABE), and Minority Business Enterprise Loan Program (MBE) among others.
- Limited Liability: As an owner of a Mississippi LLC, you will be able to enjoy limited liability protection quite similar to what a corporation enjoys.
- Flexible Profit Distribution: A start-up company in Mississippi LLC has the benefit of being able to select different ways of distribution of profits unlike a partnership where the distribution is 50-50.
Advantage#2: Mississippi Business Incentives
Once you register a new company in Mississippi, there are several business incentives and programs that your company can benefit from. Let’s take a look at some of the most popular programs:
- Rural Economic Development (RED) Credits: This is a tax credit program that you can benefit from after you register a new business in Mississippi. These credits are available to those businesses that use industrial revenue bonds that have been issued by the Mississippi Business Finance Corporation (MBFC). Business entities that qualify for this tax credit program include manufacturers, data and information processing facilities, technology-intensive enterprises, distribution and warehouse facilities, and telecommunications enterprises.
- Sales and Use Tax Rebate for Tourism Projects: This is another beneficial program for businesses in the tourism industry. The program is being administered by the Mississippi Development Authority (MDA). The amount of rebate a business entity can derive is up to 80% of the amount of sales tax revenue collected from that business. Businesses that can qualify for this program include Tourist attractions like theme or water parks, Professional sports facilities, full service hotel, and much more.
- Health Care Industry Zone Incentive Program: This is a program that is targeted at a start-up company in Mississippi that is located or planning to expand in the Health Care Zones of the state. The incentive that a business can derive through this program is a 10-year state income tax depreciation deduction as well as sales tax exemption for materials and equipment.
Are there any Disadvantages of Incorporating in Mississippi?
If you register a new company in Mississippi, are there any disadvantages? When it comes to tax or forming a business in Mississippi, there are no disadvantages. The only problems that businesses might face in the state are like limited life if you form an LLC and higher registration fee if you are a foreign LLC. It is important to note that the advantages of forming a business in the state are far more than the disadvantages.