Mississippi will gradually reduce its income tax while lowering grocery taxes and increasing gas taxes under a new bill signed into law by Gov. Tate Reeves. The plan aims to eliminate the income tax over time, starting with a reduction from 4.4% in 2025 to 3% in 2030.
The legislation also reduces the grocery sales tax from 7% to 5% starting July 1, 2025, and increases the gas tax from 18 cents per gallon to 21 cents per gallon on the same date. The plan will adjust the gas tax every other year based on changes in the U.S. Federal Highway Administration’s National Highway Construction Cost Index.
While supporters hail the plan as a boost for economic growth, opponents warn of potential revenue losses and mathematical errors that could lead to earlier-than-expected reductions. Critics also point out a typo in the bill, but Lt. Gov. Delbert Hosemann dismissed it with a Biblical analogy.
The plan will also reform the Public Employees’ Retirement System by introducing a new tier for state employees hired after March 1, 2026, while terminating the Supplemental Legislative Retirement Plan for certain lawmakers and Senate presidents.
Overall, Mississippi is taking a significant step towards reducing its tax burden, aiming to attract businesses, talent, and families to the state.
Source: https://www.mississippifreepress.org/mississippi-governor-signs-income-grocery-tax-cuts-and-gas-tax-increase-into-law