Taxes in Mississippi: State Tax Guide 2026
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Taxes in Mississippi: State Tax 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 has been on a steady path to reduce its income tax. The state eliminated the bottom bracket and is phasing its rate down to a flat ~4.00% by 2026. Combined with the lowest cost of living in the nation, no estate or inheritance tax, and exemptions for Social Security and most retirement income, Mississippi offers a low-cost environment — though above-average sales taxes and a full grocery tax are notable drawbacks.
Mississippi Income Tax Rates (2026)
Mississippi is transitioning to a flat income tax:
| Tax Rate | Taxable Income Range |
|---|---|
| 0.00% | $0 – ~$10,000 |
| ~4.00% | Over ~$10,000 |
Mississippi eliminated the 3% bracket (which applied to $5,000–$10,000) and has been reducing the top rate from 5.00%. The target is a flat 4.00% on income above $10,000 by 2026.
Mississippi’s standard deduction is ~$2,300 for single filers and ~$4,600 for married filing jointly. Personal exemptions are ~$6,000 for single and ~$12,000 for married, providing a significant zero-tax floor.
Sales Tax
| Component | Rate |
|---|---|
| State base rate | 7.00% |
| Average combined (state + local) | ~7.07% |
| Maximum local add-on | 0.25% (limited jurisdictions) |
Mississippi has a high state rate but very limited local add-ons, keeping the combined rate relatively uniform statewide.
Groceries: Fully taxable at the 7.00% state rate. Mississippi is one of the few remaining states that taxes groceries at the full rate with no reduction.
Exempt from sales tax: Prescription medications, manufacturing machinery, and certain agricultural inputs.
Property Tax
| Metric | Amount |
|---|---|
| Average effective rate | ~0.65% |
| National average | 0.99% |
Mississippi property taxes are below the national average.
Assessment ratios:
- Residential (owner-occupied): 10% of true value
- Other residential: 15% of true value
- Commercial/industrial: 15% of true value
- Personal property (vehicles): 30% of true value
Homestead exemption: The first ~$7,500 of assessed value (equivalent to ~$75,000 of true value at the 10% ratio) is exempt from all ad valorem taxes for owner-occupied homes. Homeowners 65+ or disabled with income below ~$42,511 are exempt from all property taxes on the first ~$75,000 of true value.
Example: A home with a true value of $180,000, assessed at 10% = $18,000. After the $7,500 homestead exemption, taxable value is $10,500. At a typical millage rate of ~100 mills, annual property tax is approximately ~$1,050.
Other Taxes
- Estate and inheritance tax: Mississippi does not impose a state estate tax or inheritance tax.
- Capital gains: Taxed as ordinary income at the flat ~4.00% rate.
- Fuel tax: ~$0.184 per gallon — among the lowest in the nation.
- Cigarette tax: ~$0.68 per pack.
- Alcohol tax: ~$5.00 per gallon of spirits. Mississippi is a control state for package liquor.
- Gaming tax: Casinos pay a graduated tax on gross gaming revenue (4%–8% depending on revenue level).
- Timber severance tax: Various rates on harvested timber.
- No local income taxes.
Tax Breaks and Credits
- No Social Security tax: Mississippi does not tax Social Security benefits.
- Retirement income exemption: All qualified retirement income from public and private pensions, 401(k), IRA, and annuity distributions is fully exempt from Mississippi income tax. This is one of the broadest retirement income exemptions in the country.
- Military retirement: Fully exempt (included in the retirement income exemption above).
- Homestead exemption: Up to ~$7,500 of assessed value exempt from property taxes. Enhanced exemption for seniors 65+ and disabled homeowners.
- Mississippi EITC: Not currently offered.
- 529 plan deduction: Up to ~$10,000 per year per taxpayer for contributions to Mississippi’s MPACT or savings plan.
- Ad valorem tax credit: Businesses can receive credits for property taxes paid on inventory and equipment under certain economic development programs.
Key Takeaways
- Mississippi’s income tax is declining to a flat ~4.00% on income above ~$10,000, one of the lowest rates among income-tax states
- All qualified retirement income — pensions, 401(k), IRA — is fully exempt, making Mississippi exceptionally retiree-friendly
- Sales tax at 7.00% on virtually everything (including groceries at the full rate) is the most significant burden for everyday spending
- Property taxes are low at ~0.65%, with a generous homestead exemption
- No state estate or inheritance tax
Next Steps
- Compare Mississippi to other states at State Income Tax Comparison: All 50 States Ranked
- Understand your federal obligation with the Federal Income Tax Guide 2026
- Make sure you claim everything you can — Tax Deductions You’re Probably Missing
- Ready to file? See How to File Your Taxes Step by Step
Tax information is for educational purposes only. Consult a licensed tax professional.