Mississippi Amends and Creates Data Center Exemptions

Effective July 1, 2019, Mississippi has enacted legislation that amends and creates sales and use tax exemptions for data centers. The first amendment applies to the state’s exemption for the purchase or lease by a “business enterprise” that owns or operates a data center of component building materials and equipment for initial construction of facilities or expansion of facilities that are certified by the Mississippi Development Authority. The legislation amends the definition of “business enterprise” to mean any business enterprise owning or operating a data center:

  • With a minimum capital investment in Mississippi of $20 million (previously $50 million)
  • Which will create a minimum of 20 new, full-time jobs (previously 50)
  • With a minimum average annual salary of not less than 125% of the average annual state wage (previously 150%)

“Data center” means a business enterprise that utilizes hardware, software, technology, infrastructure and/or workforce, to store, manage or manipulate digital data. Upon the issuance of the certification, the business enterprise will be exempt from state taxes for a period of 10 years subject to the performance requirements set out in the agreement with the Mississippi Development Authority. Previously, there was no specified time limit for the exemption. The exemption also now applies to all income tax imposed on income earned by the certified business enterprise and Franchise tax imposed on the value of capital used, invested or employed by the certified business enterprise.

The legislation also expands an existing sales and use tax exemption on purchases of utilities by data centers. The exemption applies to purchases of electricity, current, power, steam, coal, natural gas, liquefied petroleum gas or other fuel used to generate electricity, to operate an electrical distribution or transmission system, to operate pipeline compressor or pumping stations, or to operate railroad locomotives. (S.B. 2271, Laws 2019)

Posted on August 12, 2019