How Much Does Mississippi Take Out for Taxes?
Explore Mississippi's approach to taxation. Learn how the state collects revenue to fund its operations.
Mississippi’s tax system funds public services and infrastructure. The Mississippi Department of Revenue oversees tax collection and compliance.
Individual Income Tax in Mississippi
Mississippi imposes an individual income tax on residents, part-year residents, and non-residents earning income from Mississippi sources. The state uses a progressive income tax system, with rates increasing with taxable income. For 2024, income over $10,000 is taxed at 4.7%. This rate will decrease to 4.4% for income over $10,000 in 2025 and to 4% in 2026.
Taxable income is determined after deductions and exemptions. Taxpayers can claim a standard deduction or itemize. Standard deduction amounts vary by filing status: $2,300 for single filers, $3,400 for heads of household, and $4,600 for married filing jointly or combined. When itemizing, taxpayers generally follow federal guidelines, but Mississippi income taxes paid are not deductible on the state return.
Personal and dependent exemptions reduce taxable income. For 2024, the personal exemption is $6,000 for single filers, $8,000 for heads of household, and $12,000 for married filing jointly or combined. An additional $1,500 exemption can be claimed for each qualifying dependent. Taxpayers or their spouses who are over 65 or blind may claim an additional $1,500 exemption.
Mississippi does not provide common individual tax credits like the Earned Income Tax Credit or the Child and Dependent Care Tax Credit. However, the state offers specialized credits, such as those for contributions to charitable organizations or for employers sponsoring skill training.
Mississippi Sales Tax Overview
Mississippi levies a statewide general sales tax on most goods and certain services. The current statewide sales tax rate is 7%. This tax is a significant source of state revenue.
Local jurisdictions may impose their own sales taxes, added to the state rate. The combined state and local sales tax rate can vary depending on the specific county or municipality where a transaction occurs.
Many everyday purchases are subject to sales tax. However, certain essential items are exempt. Groceries, prescription drugs, and medical equipment are exempt from sales tax.
Understanding Mississippi Property Tax
Property tax in Mississippi is primarily assessed and collected at the local level by counties, municipalities, and school districts. State laws establish the framework for property taxation, which is based on the assessed value of real and personal property.
The assessment ratio, the percentage of a property’s fair market value used for assessment, varies by property type. Residential property is assessed at 10% of its true value. Commercial property is assessed at 15% of its true value.
Local taxing authorities apply millage rates to the assessed value. A mill is one-tenth of a cent, or $1 per $1,000 of assessed value. These millage rates are set annually by local governing bodies to fund services like schools, law enforcement, and roads.
The homestead exemption provides a reduction in the assessed value of a primary residence for property tax purposes. To qualify, a property must be the homeowner’s principal place of residence, and the homeowner must meet eligibility criteria.
Other Notable Mississippi Taxes
Mississippi also levies other taxes. The motor fuel tax is applied to gasoline and diesel purchases, funding transportation infrastructure projects. The tax is 18 cents per gallon.
Vehicle owners pay various registration fees and related taxes when titling and renewing their vehicle registrations. These charges contribute to the maintenance of roads and bridges, as well as administrative costs associated with vehicle regulation.
Mississippi imposes excise taxes on specific goods, including alcohol and tobacco products. The state levies a cigarette excise tax of 68 cents per pack. These taxes are typically incorporated into the price of the product.