Our comprehensive guide to taxes on retirement income, property and purchases, as well as special tax breaks for seniors, in every state. Go to Retiree Tax Map Mississippi View State Compare List (0) selected | Compare up to 5 The Bottom Line Most Tax-Friendly One of Kiplinger's top ten most tax-friendly states for retirees, the Magnolia State offers a sweet income tax deal for retirees. It not only exempts Social Security benefits from state income taxes, but it also excludes all qualified retirement income. Remaining income is taxed at a maximum 5%. Mississippi is home to some of the cheapest property taxes in the nation. Seniors qualify for a homestead exemption on the first $75,000 of value. State Sales Tax 7%. Prescription drugs, residential utilities, motor fuel, newspapers, health care services, and payments made by Medicare and Medicaid are exempt. Many counties and cities impose convention and tourism taxes on lodging and restaurant receipts. Income Tax Range Low: 3% (on less than $5,000 of taxable income)High: 5% (on more than $10,000 of taxable income) Social Security Benefits are not taxed. Exemptions for Other Retirement Income Qualified retirement income -- including income from IRAs, 401(k)s, 403(b)s, Keoghs, and qualified public and private pension plans -- is exempt from state income tax. (Early distributions are not considered retirement income and may be subject to tax.) Interest income from federal securities and obligations of Mississippi and its political subdivisions are all exempt. Railroad Retirement benefits are not taxed.IRAsExempt from state income tax. 401(k)s and Other Defined-Contribution Employer Retirement PlansExempt from state income tax. Private PensionsExempt from state income tax.Public PensionsExempt from state income tax. Property Taxes The state offers a homestead exemption of up to $300 for all eligible taxpayers. Median property tax on Mississippi's median home value of $97,500 is $778, according to the Tax Foundation.Tax breaks for seniors: For homeowners 65 and older or totally disabled, there is an exemption on the first $75,000 of value. Inheritance andEstate Taxes There is no inheritance tax or estate tax.