Signed by Governor Tate Reeves

Vote Smart's Synopsis:

Vote to concur with Senate amendments and pass a bill that repeals the state income tax, reduces the state grocery tax, and increases sales taxes and gas taxes in Mississippi.

Highlights:

• Reduces state income tax from 4% to 3% beginning in 2026, then gradually be reduced by 0.3% each year thereafter until the tax is fully repealed in 10 years (Sec. 1-14).

• Establishes a 1.5% sales tax for local governments unless they opt out and increases the state’s net sales tax from 7% to 8.5% (Sec. 1-14).

• Reduces the tax on unprepared food (grocery tax) from 7% to 2.5% over the next 10 years (Sec. 1-14).

• Specifies that new local sales tax would still be levied on food, for a net 4% grocery tax once fully enacted (Sec. 1-14).

• Requires sales taxes collected by counties go toward local road maintenance (Sec. 1-14).

• Establishes a new 5% tax on gasoline sales and specifies revenue shall go toward the Mississippi Department of Transportation’s budget for road and bridge infrastructure (Sec. 1-14).

• Specifies that the provisions of this bill shall take effect beginning July 1, 2025 (Sec. 15).

Full Bill Text

Vote Smart's Synopsis:

Vote to amend and pass a bill that repeals the state income tax, reduces the state grocery tax, and increases sales taxes and gas taxes in Mississippi.

Highlights:

• Reduces state income tax from 4% to 3% beginning in 2026, then gradually be reduced by 0.3% each year thereafter until the tax is fully repealed in 10 years (Sec. 1-14).

• Establishes a 1.5% sales tax for local governments unless they opt out and increases the state’s net sales tax from 7% to 8.5% (Sec. 1-14).

• Reduces the tax on unprepared food (grocery tax) from 7% to 2.5% over the next 10 years (Sec. 1-14).

• Specifies that new local sales tax would still be levied on food, for a net 4% grocery tax once fully enacted (Sec. 1-14).

• Requires sales taxes collected by counties go toward local road maintenance (Sec. 1-14).

• Establishes a new 5% tax on gasoline sales and specifies revenue shall go toward the Mississippi Department of Transportation’s budget for road and bridge infrastructure (Sec. 1-14).

• Specifies that the provisions of this bill shall take effect beginning July 1, 2025 (Sec. 15).

Full Bill Text

Vote Smart's Synopsis:

Vote to pass a bill that repeals the state income tax, reduces the state grocery tax, and increases sales taxes and gas taxes in Mississippi.

Highlights:

• Reduces state income tax from 4% to 3% beginning in 2026, then gradually be reduced by 0.3% each year thereafter until the tax is fully repealed in 10 years (Sec. 1-14).

• Establishes a 1.5% sales tax for local governments unless they opt out and increases the state’s net sales tax from 7% to 8.5% (Sec. 1-14).

• Reduces the tax on unprepared food (grocery tax) from 7% to 2.5% over the next 10 years (Sec. 1-14).

• Specifies that new local sales tax would still be levied on food, for a net 4% grocery tax once fully enacted (Sec. 1-14).

• Requires sales taxes collected by counties go toward local road maintenance (Sec. 1-14).

• Establishes a new 5% tax on gasoline sales and specifies revenue shall go toward the Mississippi Department of Transportation’s budget for road and bridge infrastructure (Sec. 1-14).

• Specifies that the provisions of this bill shall take effect beginning July 1, 2025 (Sec. 15).

Full Bill Text