The Deal
This is the contract that abates xAI's property taxes in Southaven and DeSoto County. The City released it. Below is what each operative clause actually says, quoted verbatim, with our plain-English reading beside it.
Who signed it
This Ad Valorem Tax Agreement (the “Agreement”) is made and entered into as of January 6, 2026 (the “Effective Date”), by and among: DeSoto County, Mississippi… the City of Southaven, Mississippi… the Tax Assessor of DeSoto County… the Tax Collector of DeSoto County… and MZX Tech, LLC, its successors and assigns (the “Company”)… The Mississippi Development Authority (“MDA”) joins this Agreement through its execution of the Certificate of Final Approval attached as Exhibit “A”.
Ad Valorem Tax Agreement, p. 1 · source documentSix parties. The City and the County are the “Granting Authorities.” The County Tax Assessor and Tax Collector are added because they are the offices that will have to bill a reduced amount every year for a decade. MZX Tech, LLC is xAI's entity; the same name appears on the police donation and on the water bills.
What xAI actually committed to
B. The Project is anticipated to involve a capital investment of over $10 billion and to create at least twenty (20) new jobs.
Ad Valorem Tax Agreement, Recital B · source documentThis is the only job figure anywhere in the agreement. Public statements described “hundreds of permanent jobs” and a $20 billion investment. The binding document sets the bar at twenty jobs and ten billion dollars.
Note the verb. The project is “anticipated to involve” that investment — recitals describe expectations, they are not covenants. The operative conditions on the abatement, in § 3, are the Minimum Capital Investment and MDA approval. Job creation is not among them.
Nothing in the released agreement requires xAI to hire anyone in order to keep the tax break, and nothing in it makes the company repay a dollar if the jobs never appear. If a clawback exists, it is in a document that has not been released. That is a records request →
How much is abated
6. Amount of Fee-in-Lieu. The FIL Amount payable for each Assessment Year of the FIL Term shall be a stated one-third (1/3) of the Taxes Otherwise Payable by the Company…
Ad Valorem Tax Agreement, § 6, p. 5 · source documentA “fee in lieu” replaces the property tax bill with a smaller fee. Here the fee is one third of what would otherwise be owed — so two thirds of the property tax is abated, every year, for the whole term.
5. Scope of Abatement. The Fee-in-Lieu granted herein shall abate and be in lieu of all Taxes Otherwise Payable and the obligation to make the FIL Payment shall be in lieu of the obligation to pay Taxes Otherwise Payable.
Ad Valorem Tax Agreement, § 5, p. 5“All” is doing real work in that sentence. This is not a discount on one parcel; it replaces the entire ad valorem obligation on the project's property with the reduced fee.
For how long, and on what
4. Property Subject to Fee-in-Lieu. All Property installed or subject to appraisal by the Tax Assessor or otherwise subject to ad valorem taxation prior to or during the FIL Term… shall be included in and subject to the Fee-in-Lieu for a period of up to ten (10) Assessment Years… specifically including Property owned by or taxable to Additional Participants, whether acquired before or during the FIL Term.
Ad Valorem Tax Agreement, § 4, p. 5Two things worth noticing. First, ten years. Second, the abatement reaches “Additional Participants” — other companies that join the project later can be swept under the same discount without a fresh public negotiation. § 21 (Assignability) governs how they are added, and lessors are pulled in automatically under Miss. Code Ann. § 27-31-104(1)(b).
Whether a future board can undo it
b. Binding Commitments. Pursuant to MCA §§ 27-31-104(4) and 27-31-107, this Agreement constitutes a binding obligation of each Party (including future County Boards and City Boards) upon execution by the Granting Authorities and the Company and approval by MDA up to and through the FIL Term…
Ad Valorem Tax Agreement, § 3.b, p. 5The boards that signed in January 2026 bound every board that follows them for the length of the term. Voters who elect a different Board of Aldermen or Board of Supervisors cannot instruct their new representatives to reopen this agreement.
Who checks the arithmetic
The agreement leaves the annual number in the hands of two county offices. Exhibit B § 2(a) requires the Tax Collector to issue a written statement of the FIL Amount each year. Exhibit B § 1(b)(iv) allows discretionary reductions for obsolescence and accelerated depreciation — meaning the taxable value of the equipment, and therefore the fee, can fall faster than the equipment wears out.
Section 10 apportions whatever is collected among the local school district, the City and the County. None of those annual statements has been published. Until they are, nobody outside those offices can say what Southaven's schools actually receive.
The Foundation has prepared a records request to the DeSoto County Tax Assessor and Tax Collector for every rendition, valuation, depreciation schedule and annual FIL statement. Use the same template yourself →
What we are not saying
A tax abatement is legal in Mississippi. Miss. Code Ann. § 27-31-104 exists precisely to let local governments grant one, and the Mississippi Development Authority approved this one. Publishing the terms is not an accusation that anybody broke a law.
What we are saying is narrower and harder to argue with: the public was given one set of numbers and the contract contains another, the contract binds boards that have not been elected yet, and the documents that would show what it costs have not been released. Those are facts about paperwork, and they are fixable by producing the paperwork.