Under Miss. Code Ann. § 27-31-101, a county board of
supervisors, or applicable municipal authority, could grant a ten (10) year
exemption from ad valorem taxes, other than state ad valorem taxes and taxes
used for school purposes. Miss.
On the other hand, Miss. Code Ann. § 27-31-104 (and the
provisions that follow therefrom) allows a county to grant a fee-in-lieu of
taxes, including taxes used for school purposes, for projects totaling over one
hundred million dollars ($100,000,000.00) in total investment. This fee-in-lieu can be granted for up to a
ten (10) year period. The fee-in-lieu is
negotiated and given final approval by the Mississippi Development Authority
(“MDA”).
Pursuant to the fee-in-lieu provisions, the fee payment
cannot be less than one third (1/3) of the ad valorem tax levy, including taxes
for school purposes. Typically, the
fee-in-lieu is contractually apportioned between the county/municipality and
the school district as determined by the board of supervisors; provided
however, the apportionment to the school districts cannot be less than the
school districts’ pro rata share based on the proportion that the millage
imposed for the benefit of the school districts bears to the millage imposed by
such levying authority for all other county or municipal purposes.
In addition and if the fee-in-lieu provides the greatest
savings, a company should negotiate a flat fee-in-lieu payment instead of tying
it to a percentage of ad valorem taxes in the event there is an increase in the
assessed value of the property or the millage rate. It would also be advisable to have the
fee-in-lieu payment cover property related to a project such as raw materials,
work-in-process, purchases and leaseholds required to establish a project,
including without limitation to, buildings, improvements and fixtures,
machinery, equipment, special tools that may be necessary, furniture and
fixtures and the replacement of the foregoing.
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