Proposed policy to reverse “brain drain” in Mississippi & create environment for knowledge-based workforce.
Mississippi is the only Sun Belt state to witness a net outmigration of population over the last 10 years. The majority of those leaving the state are educated potential high-wage earners that have recently graduated from Mississippi colleges or universities.This has a negative impact on economic development, workforce development, entrepreneurism, corporate retention and attraction (especially of knowledge-based companies).
In 2015 House Bill 1601, called the “Mississippi Jobs Creation Act of 2015” was filed. The bill sought to give recent graduates of Mississippi colleges/universities a 5-year state income tax hiatus if they took a “qualifying job” in state. In advance of the 2017/2018 legislative session, the proposed legislative concept has been refined.
Fast Forward Mississippi seeks to revive the 2015 legislation with significant changes for the 2017 legislative session. Proposed new structure of the policy would be as follows:
- Recent graduates of any accredited college or university (not just in MS) would be eventually eligible for a 5-year state income tax credit upon becoming an employed taxpayer in Mississippi within one year of graduation (essentially taking a job in Mississippi).
- Rather than seeing the credit on yearly income tax, qualifying individuals will pay their state tax at normal tax rates. The tax dollars from these qualifying individuals are collected by the state and ideally held in an interest-bearing account over the course of five years.
- At the end of the fifth year of in-state employment, the qualified individual will receive their credit in the form of a one lump-sum refund.
- If the qualifying individual uses at least 75% of the lump-sum refund to purchase real estate in Mississippi (commercial or residential), the individual will receive the refund 100% tax-free.
- If the qualifying individual is an owner of a Mississippi-established business (an LLP or LLC registered through the MS Secretary of State’s Office or a shareholder in an “inc.” registered with the MS Secretary of State’s Office), the individual will receive the refund 100% tax-free.
- If the qualifying individual does not meet one or both of the criteria described above, they will receive their refund as a lump sum payment with a one-time state tax of XX% (rate TBD by scoring. Ideally it would fall somewhere around 10%).
- If the individual establishes residence in another state anytime during the five year period, the entire tax credit is forfeited and the state keeps the money.
- The state keeps all interest accrued during five year period it is holding the tax credit.
We ask for your support. Let’s do it, Mississippi.