In surprise move, House votes to send Senate income tax elimination plan to governor. But is it over?

This story will be updated.

In a stunning move, the House on Thursday morning voted 92-27 to agree with the Senate’s latest plan to eliminate the state income tax and increase the gasoline tax, perhaps ending what could have been a raucous intraparty debate at the Capitol for the next two weeks.  

“Let’s end the tax on work once and for all in the state of Mississippi,” House Ways and Means Chairman Trey Lamar said.

The vote was a surprise. The House and Senate up until the vote had appeared to still be far apart on particulars of a tax overhaul. The bill approved Thursday was held on a motion to reconsider by the GOP House leadership, and Gov. Tate Reeves, House Speaker Jason White and Lt. Gov. Delbert Hosemann all declined comment on the issue — bizarre for such monumental policy.

Rep. Karl Oliver, a Republican from Winona who is part of House leadership, held the bill on a procedural motion, meaning lawmakers could still debate and work on the proposal before it goes to the governor’s office for consideration.

The proposal would decrease the 4% income tax rate by .25% each year from 2027 to 2030 and leaves it at 3% in 2030. After it reaches 3%, the income tax would be reduced with “growth triggers” or at a proportional rate depending on the difference between the state’s revenue and spending plans that year. 

The proposal also would reduce the sales tax on groceries from 7% to 5%, increases the 18.4-cents-a-gallon gasoline tax by 9 cents over three years and change benefits for government employees hired after March 2026 to a more austere retirement plan.

Gov. Reeves and Speaker White, a Republican from West, have forcefully pushed lawmakers to eliminate what they refer to as the “tax on work.” Hosemann and the Senate had been reluctant on full elimination of the tax, urging caution in uncertain economic times and calling for only a cut to the tax instead. However, the Senate this week had passed a counter offer, that would eliminate the income tax over many years, provided economic growth “triggers” are met along the way.

The plan the House voted to send to the governor — pending the holding motion — on Thursday would increase the tax on gasoline by a total of 9 cents a gallon over three years, then increase along with road construction prices thereafter. The House had at first proposed a 5% sales tax on gasoline, then countered with a 15 cents a gallon increase.

Mississippi is perennially among the most federally dependent states, receiving nearly a 3-1 return for every dollar in federal taxes it pays. Some Democratic lawmakers have said that, given the uncertainty surrounding the federal spending cuts, now is not the time to drastically rework the state’s tax code.

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.

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