Sales and Use Tax Exemption for Broadband Technology

Mississippi Department of Revenue, Mississippi Development Authority

Program Type:

Tax Incentive

Eligible Geography:

Mississippi

Summary:

A sales and use tax exemption is available for eligible telecommunications businesses that deploy broadband technology. The exemption is designed to encourage investment in the infrastructure needed to develop high-speed internet access throughout the state, especially in rural areas.

The amount of exemption allowed depends on where in the state the technology is deployed. For technology deployed in less developed counties, a full exemption from sales and use tax is provided; for all other areas of the state, a one-half exemption is available.

This exemption applies to the general 7 percent sales tax on qualifying equipment and benefits telecommunications companies deploying broadband technology in less developed areas. For commercial construction in Mississippi, there is a contractor’s tax assessed on the construction of commercial real property that is calculated as 3.5 percent of the contractor’s gross receipts from the construction. Contractor’s tax has no exemptions, and the contractor is allowed to purchase all component building materials exempt from sales tax. Under this sales and use tax exemption, however, an eligible telecommunications business can directly purchase qualifying equipment, and if these materials are not part of the construction contract, they are not subject to contractor’s tax and sales tax is not due on them. To qualify for the exemption, the materials must be purchased by, billed to and paid for directly by the eligible business. Contractor’s tax will still apply to the labor portion of the construction contract.

Eligible Recipients:

Internet Service Provider

Eligible Recipients Detail:

Telecommunications Businesses that deploy broadband technology

Eligible Purpose:

Last Mile Connectivity; Middle Mile Connectivity; Backbone Connectivity; Broadband-Related Industry

Eligible Purpose Detail:

Qualifying equipment used in the deployment of broadband technologies includes asynchronous transfer mode switches, digital subscriber line access multiplexers, routers, servers, multiplexes, fiber optics, and related equipment.

Funding Match/Terms:

NA

Note/Additional Resources:

https://mississippi.org/manage/wp-content/uploads/sales-and-use-tax-exemption-broadband-technology.pdf

Source:

https://www.c2er.org/state-business-incentives-database/search/?view=detail&programID=2769