Mississippi Tax and CPA Services: State, County and City Taxes

Mississippi has lowered its income tax rate step by step and now taxes only the income above the first $10,000, does not tax Social Security or most qualifying retirement income, and levies a 7 percent sales tax with lower rates on groceries and vehicles. A layer of local tourism and economic development taxes sits on top of the state sales tax. This page explains the main rules for residents, retirees, business owners and employers. We serve Mississippi clients remotely from our Naperville, Illinois office.

Individual income tax

The Department of Revenue's rate schedule applies 0 percent to the first $10,000 of taxable income and a single rate on the rest. The rate for tax year 2025 is 4.4 percent, for 2026 it is 4 percent, and for 2027 it is scheduled to be 3.75 percent, according to the Department's general information page. The old 4 percent bracket was eliminated for 2024 and forward. For married couples filing jointly, the first $10,000 of each spouse's taxable income is exempt, and each spouse's remaining taxable income is taxed at the same rate.

Other 2025 amounts listed by the Department include a personal exemption of $6,000 for a single filer and $12,000 for married filing jointly, and a standard deduction of $2,300 for single filers ($4,600 for married filing jointly). A single resident with gross income above $8,300 plus $1,500 per dependent generally must file.

Retirement. Mississippi does not tax benefits from U.S. Social Security, Railroad Retirement, public welfare assistance, Veterans Administration payments or workers' compensation, even where federal law taxes part of them. The Department adds that generally, retirement income, pensions and annuities are not subject to Mississippi income tax if the recipient has met the retirement plan requirements, while early distributions are not considered retirement income and may be taxed. A retiree considering a move should look at the plan type and age rather than assume everything is exempt.

Other specifics: the first $15,000 of National Guard or reserve salary is excluded from income, a dependent care credit equals 25 percent of the federal credit for taxpayers with federal AGI of $50,000 or less, and gambling winnings from Mississippi casinos reported on a W-2G or 1099 carry a 3 percent withholding that is not refundable. Mississippi no longer mails personal income tax forms. See our multi-state tax service for part-year and nonresident filings.

Business taxes

Mississippi taxes corporations under its income tax laws and its separate corporate franchise tax laws, and S corporations under their own chapter of the code. Corporate, franchise and pass-through entities register for online access to the Department's Taxpayer Access Point (TAP) to file, pay estimated tax and make payments on returns, billings and audits. Check the Department's current guidance for the franchise tax rate and filing rules each year. For pass-through owners, see S corporation taxes and SALT deduction and property taxes.

Sales and use tax

Mississippi applies a regular retail rate of 7 percent to sales of tangible personal property unless the law exempts the item or gives a reduced rate. Other rates listed by the Department include 5 percent on groceries (food and drink eligible to be bought with SNAP benefits), 5 percent on automobiles and light trucks of 10,000 pounds or less, 3 percent on heavier trucks, aircraft, semitrailers and mobile and modular homes, and 1.5 percent on manufacturing machinery, farm tractors and farm implements. The tax is based on gross proceeds or gross income depending on the type of business. The Department also administers tourism and economic development taxes and city utility taxes, which add local layers in some places. See sales tax nexus and our sales tax service.

Payroll in Mississippi

• Withholding: employers withhold Mississippi income tax and file through the Department's online system. See state income tax withholding.
• Unemployment insurance: the Mississippi Department of Employment Security (MDES) handles employer registration, tax and wage reporting; employers file and pay unemployment tax through its online system. See state unemployment insurance.
• New hires: MDES requires employers to report new hires. See new hire reporting.

Counties, cities and property tax

Cities and counties in Mississippi rely mainly on property tax and on specific local levies. The Department of Revenue's Property division supports counties with assessments, collections and homestead exemptions, so local questions go to your county tax assessor or collector. Hotel, restaurant and other tourism and economic development taxes are authorized for certain localities and are administered with the sales tax system, and some cities have utility taxes. Mississippi has no city or county income tax. For neighboring states, see Louisiana and Alabama.

How we can help

We prepare Mississippi resident, part-year and nonresident returns, check retirement income treatment, help businesses register for TAP and sales tax, and set up payroll. If you receive a notice from the Department of Revenue, see state tax notices and representation. Contact us to begin; this page is general information.

Frequently asked questions

General information only, not tax, legal or accounting advice for your situation. Rules, limits and deadlines change; confirm the current rules with the official source or a qualified professional before you act. Reading this page does not create a professional relationship with CPA Tax Payroll and Accounting Corp.