2025 Tax Calculator - Empower Mississippi

Current Law

Previous tax legislation placed a 4.4% rate for 2025 and a 4.0% starting in 2026 on taxable income above $10,000 per taxpayer.

Original Senate Plan (SB 3095)

No change from current law for 2025 (4.4%) or 2026 (4%). For 2027-2029, reduce by 0.25% each year, and 0.26% in 2030 to arrive at 2.99%

Original House Plan (House Bill 1)

No change from current law for 2025 (4.4%) or 2026 (4%). In 2027, the rate would be 3%, and for years following, a 0.3% per year decrease until eliminated in 2037.

Final Version of HB 1, Signed by the Governor on March 27, 2025.

No change from current law for 2025 (4.4%) or 2026 (4%). For 2027-2030, reduce by 0.25% each year, to arrive at 3% in 2030.

In subsequent years, reductions in the rate would only occur if certain conditions are met, including having the state's Rainy Day Fund enlarged and fully funded, and having the budget meet certain annual targets. If those targets are met, the income tax rate would decrease by 0.2% to 0.3% for the following year, depending on the size of the surplus.

Those targets are essentially based on having a General Fund surplus, as measured by the previous year's General Fund revenue minus the current year appropriations. That surplus is then compared to the dollar amount of reduced revenue that would result from a full 1% decrease in the income tax rate (for instance, going from 3% to 2% rate). If the budget surplus is at least 0.85% of the decreased revenue from a 1% lower tax rate, the tax rate would decrease by 0.2% (in the example above, it would go from 3% to 2.8%). If, instead of 0.85%, the difference is 1.15% or higher, the rate would decrease by 0.3% (to 2.7% in the example).

Because those percentages are so low, it is highly probable that the upper target will be reached unless there is a recession, so the most likely scenario is that the income tax rate will decrease by 0.3% per year from 2031 to 2040, at which time it will reach 0%.

State Sales Tax on Groceries

State Sales Tax on Non-Grocery Items

Local Sales Tax on Grocery and Non-Grocery Items

Fuel Tax

Current Law

18.4 cents excise tax per gallon.

Original Senate Plan (SB 3095)

On July 1 of 2025, 2026, and 2027, increase 3 cents per gallon each year, for total of 9 cents per gallon. On July 1, 2029, and every two years thereafter, increase by up to 1 cent per gallon, based on inflation in highway costs

Original House Plan (House Bill 1)

No change to the current excise tax, but beginning July 1, 2026, adds a 5% sales tax to the total fuel purchase. For example, a $30 fuel purchase would increase to $31.50.

Final Version of HB 1, Signed by the Governor on March 27, 2025.

On July 1 of 2025, 2026, and 2027, increase 3 cents per gallon each year, for total of 9 cents per gallon. On July 1, 2029, and every two years thereafter, increase by up to 1 cent per gallon, based on inflation in highway costs.

Mississippi’s New Tax Law

How will it affect you?

Click on a tax to see the changes contained in the new law

2025-2040 Personal Tax Calculator