Mississippi‘s tax system ranks 27th overall on the 2025 State Tax Competitiveness Index. Mississippi, which ranks near the middle of the pack on the Index, benefits from a low, flat individual income tax rate and a relatively low corporate income tax rate. However, Mississippi’s throwback rule exposes in-state firms to higher Mississippi tax liability when they sell tangible property into states with which they do not have nexus. Additionally, Mississippi maintains a graduated-rate corporate income tax despite moving to a single-rate individual income tax in 2023.
While Mississippi’s statewide sales tax rate is among the highest in the country, low reliance on local sales taxes yields a combined state and average local rate that sits near the middle of the pack.
Notably, as part of a series of recent pro-growth reforms, in 2023, Mississippi joined Oklahoma to become the second state in the country to enact permanent full expensing for machinery and equipment investments, thereby increasing the marginal attractiveness of Mississippi for firms that invest in large amounts of capital. Additionally, Mississippi’s capital stock tax is scheduled to phase out by 2028, which will further improve the state’s ability to attract business investment.
While Mississippi’s property taxes are relatively low, its taxation of tangible personal property, including business inventory, as well as intangible property, penalizes in-state investment and hurts the state’s property tax component score.
| Category | Rank | Rank Change | Score |
|---|---|---|---|
| Overall | 27 | -2 | 5.09 |
| Corporate Taxes | 6 | 0 | 5.78 |
| Individual Income Taxes | 32 | 0 | 5.06 |
| Sales Taxes | 25 | -1 | 4.77 |
| Property Taxes | 38 | -3 | 4.33 |
| Unemployment Insurance Taxes | 15 | 3 | 5.54 |
Get facts about taxes in your state and around the U.S.
From 2021-2024, within the span of 3.5 years, more states enacted laws converting graduated-rate individual income tax structures into single-rate income tax structures than did so in the whole 108-year history of state income taxation up until that point.
10 min read
Americans were on the move in 2024, and many chose low-tax states over high-tax ones.
6 min read
Thirty-nine states will begin 2025 with notable tax changes, including nine states cutting individual income taxes. Recent years have seen a wave of significant tax reforms, and the changes scheduled for 2025 show that these efforts have not let up.
25 min read