Mississippi State Income Tax 2023 - 2024

Mississippi has a state income tax imposed on individuals and corporations that make taxable income in the state. The tax is collected through the withholding system and applies to all taxable income, including long-term capital gains. Taxable income includes wages, salaries, tips, and self-employment income. It also includes business and professional income, interest, dividends, and rent. Mississippi State Income Tax rate is currently 5%, which is slightly below the national average. It is complemented by a statewide sales tax of 7% and two local sales taxes in Jackson and Tupelo.

In 2022, Mississippi lawmakers passed the largest tax cut in the state’s history. The phase-in of that cut began this year, and revenue from the state income tax is down as a result. However, state economist Corey Miller says the drop in collection likely results from ending federal COVID-19 payments rather than economic trends. It is unlikely that legislators will attempt to eliminate the state’s income tax this year.

Who Must Pay Mississippi State Income Tax?

Regardless of the source, residents must pay state income tax on all gross income. A resident is defined as an individual who maintains a place of abode in Mississippi and exercises the rights of citizenship, such as voting and homestead exemption. Individuals who do not qualify as a resident of the state may file for a partial-year residency or nonresident status.

The state income tax is based on the state’s gross receipts, which are collected from the sales of goods and services. These revenues are then used to fund local government services. In addition to income tax, the state also taxes corporate profits and franchise taxes. It also imposes a sales and use tax on certain items, such as fuel, tobacco, beer, and gambling.

How to File a Mississippi State Income Tax Return?

The Department of Revenue is responsible for collecting tax revenues supporting state and local services in Mississippi. Its responsibilities include:

• Titling and registration of motor vehicles.
• Monitoring ad valorem assessments throughout the state to ensure consistency and fairness.
• Overseeing the collection of income taxes.

Individuals must file a Mississippi return if they have had Mississippi income taxes withheld from their wages or if they are nonresidents or part-year residents who receive income that is subject to tax in the state. In addition, Mississippi follows IRS guidelines for making estimated tax payments. Individuals who cannot meet the filing deadline may qualify for an automatic six-month extension. However, this does not extend the time for making tax payments. Those who file a Mississippi return must also submit a federal extension form with their return.