Charles E. Stokes, in the Official Capacity of Tax Assessor of Hinds County, Mississippi; and Hinds County, Mississippi v. Jackson Sales & Storage Company, Miss. S. Ct., Dkt. No. 2022-CA-00371-SCT, 11/30/2023
The Supreme Court of Mississippi recently ruled that even though Jackson Sales & Storage had a valid freeport warehouse license up until 2018, its failure to submit a renewal application beginning in 2019 was basis for the Assessor’s denial of their inventory freeport exemption for that year. The company argued that from 1981 to 2019, their freeport warehouse license was valid and did not require the submission of a renewal application. However, the Mississippi Supreme Court disagreed and clarified that the Board of Supervisors in any jurisdiction has full discretion over whether to grant an inventory freeport exemption, which is subject to renewal, and to determine how long that license is in effect. The Mississippi Supreme Court determined that although the company’s freeport license was valid and in effect, it is subject to renewal as personal property owned by the company is not exempt in perpetuity.
Not all jurisdictions in Mississippi have the same inventory freeport warehouse license application requirements. Any business seeking to exempt inventory in Mississippi based on the movement of inventory out of the state, should thoroughly research the process for obtaining a freeport warehouse license in the jurisdiction where the warehouse is located. Each county has its own interpretation of the process for obtaining a freeport warehouse license. Most jurisdictions require a fee of $10 or more, and some require that a representative of the company seeking the freeport exemption become a member of the local Board of Supervisors. Some jurisdictions grant only a one-year license while others may allow a license to be valid for several years.
The Mississippi inventory freeport exemption may provide the opportunity to substantially reduce your overall tax liability so it is important to be familiar with the requirements and the application process. Understanding the nuances of the freeport warehouse license application between every Mississippi assessing jurisdiction can be challenging. At Baden Tax Management, we can help you navigate this process and understand the requirements to ensure your application is complete. If you are uncertain about the status of your freeport warehouse license or would like assistance with the application process, give us a call and we can help!