Bottom Line
Middle-Class Families: Mixed Tax Picture (Go to the Kiplinger Tax Map for Middle-Class Families)
Retirees: Tax-Friendly (Go to the Kiplinger Tax Map for Retirees)
The tea is sweet in the Magnolia State, and so is the tax environment for many residents. One thing Mississippi has going for it is comparatively low property tax rates. The state's median annual property tax rate is well below the U.S. average.
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Plus, the state's income tax burden is being lightened. For 2022, the first $5,000 of taxable income is exempt, but the first $10,000 is exempt beginning in 2023. Plus, the tax rate on taxable income above $10,000 is gradually reduced starting in 2024. Seniors will also like the fact that most retirement income is exempt from Mississippi tax.
Sales taxes are on the high end, though, which balances out some of the good news on property and income taxes. Mississippi's state sales tax rate of 7% is tied for the second-highest in the U.S. (only California, at 7.25%, is higher), and Mississippi is one of a minority of states that charges sales tax on groceries. But localities add very little, if anything, on top of the state's rate.
Mississippi Income Taxes
Mississippi Income Tax Range
Low: 3% (on taxable income from $4,001 to $5,000)
High: 5% (on taxable income over $10,000)
Beginning in 2022, there is no tax on the first $5,000 of taxable income. The lowest rate will be 4% on taxable income from $5,001 to $10,000.
Starting in 2023, there is no tax on the first $10,000 of taxable income. The tax rate on taxable income above $10,000 will also be reduced to 4.7% in 2024, 4.4% in 2025, and 4% in 2026 and thereafter.
Mississippi Taxation of Social Security Benefits
Social Security benefits are not taxed by the state.
Mississippi Tax Breaks for Other Retirement Income
Income from private employer, government, and military retirement plans is exempt.
Railroad Retirement benefits are also exempt.
Mississippi Sales Tax
7% state levy. Only two localities, Jackson (1%) and Tupelo (0.25%) add to that. According to the Tax Foundation, that makes for an average combined rate of 7.07%.
- Groceries: Taxable
- Clothing: Taxable
- Motor Vehicles: Taxable (5%)
- Prescription Drugs: Exempt
Mississippi Real Property Taxes
In Mississippi, the median property tax rate is $795 per $100,000 of assessed home value.
Mississippi Property Tax Breaks for Retirees
For homeowners 65 and older or totally disabled, there is an exemption on the first $75,000 of value.
Mississippi Motor Fuel Taxes
Gasoline: 18.79¢ per gallon (Hancock, Harrison and Jackson counties charge an additional 3¢ per gallon to fund sea wall construction).
Diesel: 18.4¢ per gallon.
Mississippi Sin Taxes
Cigarettes: $0.68 per pack
Other tobacco products: 15% of the wholesale price
Beer: $0.43 per gallon
Wine: $0.35 per gallon ($1 if sparkling)
Liquor: $2.50 per gallon
Mississippi Estate and Inheritance Taxes
No estate or inheritance tax.
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