Sales Tax in Mississippi: Complete Guide 2026
Data Notice: Figures, rates, and statistics cited in this article are based on the most recent available data at time of writing and may reflect projections or prior-year figures. Always verify current numbers with official sources before making financial, medical, or educational decisions.
Sales Tax in Mississippi: Complete Guide 2026
Tax information is for educational purposes only and does not constitute tax advice. Consult a licensed tax professional for your specific situation.
Mississippi levies a ~7% state sales tax, one of the highest state rates in the country. The state’s approach to sales tax includes limited local additions and a tax on groceries, though recent legislation has been addressing the grocery tax burden. Understanding Mississippi’s sales tax rates, exemptions, and special provisions helps residents and business owners navigate the system and plan their budgets effectively.
Mississippi Sales Tax Rates
| Component | Rate |
|---|---|
| State sales tax rate | ~7% |
| Maximum local sales tax rate | ~0.25% (limited) |
| Average combined rate | ~7.07% |
| Maximum possible combined rate | ~7.25% |
Mississippi’s local sales tax options are very limited compared to most states. Only a small number of jurisdictions levy additional local taxes, and the maximum local addition is only ~0.25%. This means the rate is effectively ~7% across most of the state.
Special Rates
| Category | Rate |
|---|---|
| General merchandise | ~7% |
| Groceries (unprepared food) | ~7% (reducing to ~0% by ~2027) |
| Farm equipment | ~1.5% |
| Manufacturing machinery | ~1.5% |
| Vehicles | ~5% (special rate, plus ~$50 fee) |
| Aircraft | ~3% |
| Utilities (residential) | ~7% |
Grocery Tax Phase-Out
Mississippi has historically been one of the few states taxing groceries at the full rate. Recent legislation has initiated a phase-out:
| Year | State Grocery Tax Rate |
|---|---|
| 2024 | ~7% |
| 2025 | ~5% |
| 2026 | ~3.5% (projected) |
| 2027 | ~0% (projected full elimination) |
The phase-out timeline and rates are subject to revenue triggers and legislative confirmation. For 2026, the projected grocery rate is approximately ~3.5%, providing meaningful relief for Mississippi households that spend a significant portion of income on food.
Impact on Households
For a family spending ~$700 per month on groceries:
| Year | Monthly Grocery Tax | Annual Grocery Tax |
|---|---|---|
| 2024 (~7%) | ~$49 | ~$588 |
| 2026 (~3.5%) | ~$24.50 | ~$294 |
| 2027 (~0%) | ~$0 | ~$0 |
The full phase-out will save the average family approximately ~$588 per year.
What Is Taxable in Mississippi
Taxable Goods
| Category | Taxable? | Rate |
|---|---|---|
| General merchandise | Yes | ~7% |
| Clothing | Yes | ~7% |
| Electronics | Yes | ~7% |
| Groceries | Yes | ~3.5% (2026 projected) |
| Prepared food | Yes | ~7% |
| Prescription drugs | No | Exempt |
| Over-the-counter medications | Yes | ~7% |
| Digital products | Yes | ~7% |
Taxable Services
Mississippi taxes some services but fewer than states like Iowa or Kentucky:
| Service Category | Taxable? |
|---|---|
| Repair and maintenance | Yes |
| Telecommunications | Yes |
| Cable and satellite TV | Yes |
| Utilities (residential) | Yes |
| Admission and amusement | Yes |
| Laundry and dry cleaning | Yes |
| Professional services | No |
| Medical services | No |
| Personal care (barbershops, salons) | No |
Sales Tax Exemptions
| Category | Details |
|---|---|
| Prescription drugs | Fully exempt |
| Farm equipment | Taxed at reduced ~1.5% rate |
| Manufacturing machinery | Taxed at reduced ~1.5% rate |
| Motor fuel | Subject to separate excise tax, not sales tax |
| Government purchases | Exempt |
| Nonprofit purchases (qualifying) | Exempt with certificate |
| Water for residential use | Exempt |
| Resale purchases | Exempt with resale certificate |
Mississippi vs. Neighboring States
| State | State Rate | Avg. Combined Rate | Groceries Taxed? | Clothing Taxed? |
|---|---|---|---|---|
| Mississippi | ~7% | ~7.07% | Yes (~3.5% in 2026) | Yes |
| Alabama | ~4% | ~9.24% | Yes (full rate) | Yes |
| Tennessee | ~7% | ~9.55% | Yes (~4% state) | Yes |
| Louisiana | ~4.45% | ~9.56% | Yes (varies) | Yes |
| Arkansas | ~6.5% | ~9.47% | Yes (reduced ~0.125%) | Yes |
Mississippi’s ~7% state rate is tied with Tennessee for the highest in the region, but its minimal local additions result in a lower combined rate than all four neighboring states. Alabama, Louisiana, Tennessee, and Arkansas all have higher average combined rates due to substantial local taxes.
For the full comparison, visit our state income tax rates comparison.
Special Sales Tax Provisions
Vehicle Sales Tax
Mississippi applies a special ~5% rate plus a ~$50 title fee on motor vehicle purchases, lower than the standard ~7% rate:
| Vehicle Price | Tax (~5%) | Title Fee | Total |
|---|---|---|---|
| ~$20,000 | ~$1,000 | ~$50 | ~$1,050 |
| ~$35,000 | ~$1,750 | ~$50 | ~$1,800 |
| ~$50,000 | ~$2,500 | ~$50 | ~$2,550 |
Contractor Sales Tax
Mississippi generally taxes materials used in construction projects. Contractors must pay sales tax on building materials they purchase, even when incorporated into real property. The cost is typically passed through to property owners.
Online Sales
Mississippi requires remote sellers meeting the economic nexus threshold of ~$250,000 in annual Mississippi sales to collect and remit sales tax. Marketplace facilitators must also collect on behalf of third-party sellers.
Tips for Managing Mississippi Sales Tax
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Budget for the grocery tax reduction. The 2026 projected rate of ~3.5% on groceries is a significant improvement over the prior ~7%. Track the phase-out schedule and adjust your household budget as rates decline. See our federal income tax guide.
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Understand the vehicle rate advantage. Mississippi’s ~5% vehicle sales tax rate is lower than the general ~7% rate. This provides a ~2% savings compared to what you would pay on other purchases.
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Business owners: distinguish service vs. product sales. Mississippi taxes fewer services than some neighboring states. If you offer both products and services, ensure you are correctly classifying transactions to avoid overcollection or undercollection.
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Farm and manufacturing rate benefits. If you purchase farm equipment or manufacturing machinery, the reduced ~1.5% rate represents a ~5.5% savings versus the standard rate. Ensure you claim the reduced rate at the point of sale or file for a refund. Consult our self-employment tax guide for business-related considerations.
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Consider the federal SALT deduction. Mississippi residents who itemize can deduct state income tax or state sales tax on their federal return. With Mississippi’s income tax at up to ~5%, most residents benefit from deducting income tax, but compare both. Use our tax bracket calculator.
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File sales tax returns on time. Mississippi sales tax returns are filed monthly (over ~300 in monthly tax due), quarterly, or annually. Late filing penalties apply. Electronic filing is required for most businesses.
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Monitor the grocery tax timeline. The full elimination of the grocery tax is projected for ~2027 but may be subject to revenue triggers. Stay informed through the Mississippi Department of Revenue for any changes that affect the timeline.
Key Takeaways
- Mississippi’s state sales tax rate is ~7%, one of the highest in the nation, but minimal local additions keep the combined rate at approximately ~7.07%.
- The state is phasing out its grocery tax, with the 2026 rate projected at ~3.5% and full elimination targeted for ~2027.
- Vehicles are taxed at a reduced ~5% rate plus a ~$50 title fee, and farm/manufacturing equipment is taxed at ~1.5%.
- Despite the high state rate, Mississippi’s combined rate is actually lower than all four neighboring states due to their extensive local taxes.
- Prescription drugs are exempt, but over-the-counter medications and residential utilities are taxable at the full rate.
- The grocery tax phase-out will save the average family approximately ~$588 per year once complete.
Next Steps
- State Income Tax Rates Comparison 2026 — See how Mississippi’s total tax burden compares.
- Federal Income Tax Guide 2026 — Understand how state taxes affect your federal return.
- Tax Bracket Calculator — Model your total Mississippi tax burden.
- Find a CPA Near You — Get help with Mississippi sales tax compliance and planning.