Bill would eliminate Mississippi state income tax. Here’s what you need to know.

quote:

---

A bill that would eventually eliminate the state’s personal income tax while adjusting state sales taxes could receive a vote in the House of Representatives as early as Tuesday afternoon.

House Bill 1439, the Mississippi Tax Freedom Act of 2021, quietly emerged Monday and was passed by the Ways and Means Committee late in the day.

---

quote:

---

The legislation would eliminate the state’s personal income tax starting in 2022 for:

•Individuals making up to $47,700
•Couples making up to $95,400
•Head-of-family individuals making up to $46,600

These exempt income levels would increase each year, assuming the state is bringing in enough revenue. That calculation would be done annually by the state Commissioner of Revenue, until the state income tax is phased out. The full phase-out could occur as soon as a decade from now, if revenue growth stays steady.

---

quote:

---

To make up for the income tax reductions, the bill proposes:

•Increasing the sales tax on most goods to 9.5%, up from 7%.
•Increasing liquor sales tax to 9.5%, up from 7%
•Adjusting farm equipment sales tax: a 4% tax, including for equipment used for logging, up from 1.5%
•Sales taxes on cars, trucks planes and mobile homes would increase to 5.5%, up from 3%
•Sales taxes on manufacturing machinery would increase to 4%, up from 1.5%

---

quote:

---

But it would also include a reduction in the state’s grocery tax:

•Food would be taxed at 4.5% through June 2024, down from 7% now
•Those taxes would be further reduced to 4% through June 2026

After that, the grocery sales taxes would stand at 3.5%

---