Mississippi could cut its income tax almost in half over the next five years while lowering the grocery tax and raising the gas tax under a plan the Mississippi Senate Finance Committee advanced on Feb. 20.
In its first year of implementation, Senate Bill 3095 would cut income taxes by $56 million and eliminate $127 million in grocery taxes. With estimated annual revenues of $70 million from the fuel tax increase, the cuts would amount to $326 million over the first five years.
“It provides instant tax relief for Mississippi citizens, and I would say it’s a responsible management moving forward on how we reduce taxes on Mississippi working families,” one of the bill’s sponsors, Sen. Josh Harkins, R-Flowood, said when introducing the legislation at a Senate Finance Committee meeting on Feb. 20.
Mississippians who make more than $10,000 in a calendar year would go from paying an income tax rate of 4.7% in 2024 to 2.99% in 2030 under the Mississippi Senate’s tax reform plan. The income tax would decrease by 0.25% each year until 2030. Senate Bill 3095 says the Legislature would review the income-tax rates before 2030 to determine if it should make any additional tax cuts.
@media ( min-width: 300px ){.newspack_global_ad.scaip-1{min-height: 99px;}}@media ( min-width: 320px ){.newspack_global_ad.scaip-1{min-height: 99px;}}@media ( min-width: 728px ){.newspack_global_ad.scaip-1{min-height: 90px;}}
“The big winners under this, apart from out-of-state corporations, are people with high incomes, and they don’t spend money,” said Mississippi Sen. Hob Bryan, D-Amory, who opposed the bill.
Mississippi’s grocery tax, which is currently the highest in the nation among the 12 states that tax groceries, would drop from 7% to 5% starting on July 1, 2025, under the Senate’s plan. The tax cut would not apply to alcohol, beer or light wine.
The proceeds from the state’s grocery tax would go to municipalities, education, infrastructure and the state’s general fund. Harkins said S.B. 3095 would increase the percentage of diversions from the grocery tax so that agencies’ budgets would not decrease.
“Nobody should see a diminished value in their budget based on the grocery (tax) going from 7% to 5%. The