BREAKING NEWS! Mississippi State Tax Income is eliminated!

This is HUGE! 

On March 27, 2025, Mississippi Governor Tate Reeves signed the “Build Up Mississippi Act” into law, initiating a gradual elimination of the state’s individual income tax. This landmark legislation positions Mississippi among a select group of states without a personal income tax. 

Key Provisions of the Act:

• Income Tax Reduction and Elimination: The law reduces the individual income tax rate to 3% by 2030. Subsequent annual decreases are planned until the tax is fully eliminated, contingent upon specific revenue growth triggers. 
• Grocery Sales Tax Reduction: The legislation decreases the sales tax on groceries from 7% to 5%, providing immediate relief to consumers. 
• Gasoline Tax Increase: To offset revenue losses from the income and grocery tax cuts, the gas tax will gradually increase by 9 cents over three years, rising from the current 18 cents per gallon to 27 cents by July 2027. 

Governor Reeves emphasized the significance of this legislation, stating, “Mississippi will no longer tax the work, the earnings, or the ambition of its people.” 

Implementation Timeline:

• 2025: Income tax rate reduced from 4% to 3%.
• 2025-2030: Annual reductions of 0.25% until the rate reaches 3%.
• 2030 Onward: Further reductions based on revenue growth, aiming for complete elimination.
  

While proponents argue that eliminating the income tax will stimulate economic growth and attract new residents and businesses, critics express concerns about potential impacts on state revenue and funding for essential services. Some economists caution that the tax cuts may disproportionately benefit higher-income individuals while placing a greater burden on lower-income residents through increased consumption taxes. 

As Mississippi embarks on this significant fiscal transformation, the long-term effects on the state’s economy, public services, and residents’ financial well-being will be closely monitored.

(c) Reported by Clarion-Ledger