Mississippi Enacts Health Care Industry Zone Act

Governor Phil Bryant recently signed the Health Care Industry Zone Act which offers tax incentives to various types of health care businesses to stimulate investment in Mississippi by supporting existing acute care hospitals.

Any qualified business that constructs or renovates a health care facility in its designated Health Care Zone will qualify for a 10-year accelerated state income tax depreciation deduction; a sales tax exemption for equipment and materials purchased from the date of the project's certification until three months after the facility is completed; and a property tax “Fee in Lieu” if certain minimum investment is made or, at the county's discretion, an ad valorem tax exemption for 10 years. Qualified businesses may also take advantage of additional incentives, including the Advantage Jobs Credit, the Jobs Tax Credit, and Infrastructure Assistance.

Designated Health Care Zones will include those areas certified by the Mississippi Development Authority (MDA) within designated counties with more than 375 certified acute care hospital beds and/or in a county having a hospital with a minimum capital investment of $250 million constructed before July 1, 2017. A health care industry facility seeking to benefit from the Act's incentives must be located within a five-mile radius of an acute care hospital and must be on real property zoned for the facility's operation.

A “health care industry facility” means a business engaged in the research and development of pharmaceuticals, biologics, biotechnology, diagnostic imaging, medical supplies, medical equipment or medicine and related manufacturing or processing, medical service providers, medical product distribution, or laboratory testing. The facility must create a minimum of 25 new full-time jobs and/or have $10 million of capital investment after July 1, 2012. If the required number of new jobs is not created at the end of five years, the MDA may revoke the business's health care industry zone certification.

Businesses and health care industry facilities seeking incentives must apply to the MDA for certification as a qualified business. Certification must be obtained prior to beginning construction on the facility or hiring employees for the facility.