Mississippi – Health Care Industry Zone Act

SALT Report 1523 – Mississippi Governor Phil Bryant recently signed the Health Care Industry Zone Act which provides sales tax incentives for qualified businesses.  The Act authorizes the creation of “health care zones” throughout the state in which certain health care related businesses that either make an investment of at least $10 million or create a minimum of 25 full time, permanent jobs within the health care zone are eligible for these tax incentives.

A “qualified health care industry facility” is defined as one that is engaged in the research and development of pharmaceuticals, biologics, biotechnology, diagnostic imaging, medical supplies, medical equipment, medicine and related manufacturing or processing, medical service providers, medical product distribution, or laboratory testing.

Under the terms of the bill the Mississippi Development Authority will consider an area a health care industry zone if the following conditions are met:

  • The area is located within three contiguous counties that have a need for more than 375 acute care hospital beds, or
  • Is located in a county that has a hospital with a minimum capital investment of $250 million and all construction is completed before July 1, 2017,
  • The health care industry facility is located within a five-mile radius of a facility with a certificate of need for hospital beds, and
  • The zoning requirements in the proposed health care industry zone allow the construction or operation of a health care industry facility
If all the conditions are met the following sales will be exempt from Mississippi sales and use tax:
  • Sales of materials used in the construction of a health care industry facility, or any addition or improvements, and
  • Sales of any machinery and equipment not purchased later than three months after the completion of the facility or additions
If the qualified business has not created and maintained the required number of jobs within 5 years, the health care industry zone certification may be revoked by the MDA however, any incentives granted will not be retroactively revoked.
The Act is effective July 1, 2012 through June 30, 2022.
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