Mississippi House Bill HB133

Mississippi 2022 Regular Session

• Introduced: 1/4/22
• Refer: 1/4/22
• Failed: 2/23/22

Caption

Income tax; revise certain provisions to address investment in federally designated qualified opportunity zones.

Impact

This bill is expected to have a significant impact on taxpayers investing in qualified opportunity zones within Mississippi. By deferring state tax liabilities on gains from such investments, it encourages local economic development and the mobilization of capital into underserved communities. The alignment with federal tax regulations aims to streamline the investment process, making it more attractive for both individual and corporate investors. Furthermore, the bill proposes an increase in the basis of property or investments under state law, consistent with federal law, which may further incentivize investments in these areas.

Summary

House Bill 133 aims to amend Section 27-7-9 of the Mississippi Code of 1972 to align state income tax laws with federal provisions regarding the recognition of gains from the sale or exchange of property, particularly in the context of qualified opportunity zones. The bill stipulates that gains not recognized or deferred under federal law for investments in qualified opportunity zone property will also not be recognized or deferred under state law. This ensures that taxpayers can benefit from similar treatment in both state and federal tax systems.

Contention

Notably, the bill may face scrutiny regarding the effectiveness of opportunity zones in delivering genuine economic benefits to the targeted communities. Critics may argue that while the tax benefits are appealing, there is little evidence that these zones have meaningfully improved economic conditions or created sustainable jobs. Thus, the bill not only has financial implications but may also spark debate about the broader efficacy of opportunity zones as a tool for economic development. Stakeholders may need to address concerns about accountability and meaningful investment beyond mere tax deferment.