The Mississippi House and Senate are weighing bills that, if passed, would reduce or eliminate the state’s personal income tax.
This year’s NFIB Mississippi member ballot shows 77.9% of small business owners want lawmakers to reduce or eliminate the personal income tax. Most small businesses in the state are organized as pass-through entities, meaning the owners pay taxes at the individual rather than the corporate rate.
The House version of the bill is called the Mississippi Tax Freedom Act of 2022. If passed, it would:
- Eliminate the state income tax
- Reduce grocery tax from 7% to 5.5%
- Reduce the price of car tags by 50%
- Raise sales tax from 7% to 8.5%
The Senate’s proposed $446.6 million tax relief package would:
- Reduce grocery tax from 7% to 5%
- Eliminate the state’s fees on car tags going to the general fund
- Offer a 2022 rebate of up to $1,000 for citizens with tax liability
- Eliminate the 4% tax bracket over the next four years
It’s estimated the House version would save the average individual $1,513 in the first year, while the Senate version would save individuals an average of $260 in the first year.